North Korea’s Oil Prices Drop, Despite EU’s Tariffs

North Korea’s oil prices have dropped significantly in just a matter of months.

According to Reuters, the value of North Korean oil has nearly halved in this short span of time. This fact demonstrates that oil has become an independent and isolated market.

United Nations’ Security Council shortened its limit on refined petroleum exports to North Korea. However, reports have shown that North Korea has no intentions of decreasing its trade measures with regards to oil. This fact is probably encouraged by a growing sense of ease in their foreign relations.

Even though North Korea’s Supreme Leader Kim Jong-un made a vague commitment to denuclearize his country, China has reportedly continued to send North Korea products related to nuclear energy.

Reuters hypothesized as to why these price decreases have occurred. Reuters’ report reads:

Gasoline was sold by private dealers in the North Korean capital Pyongyang at about $1.24 per kg as of Tuesday, down 33 percent from $1.86 per kg on June 5 and 44 percent from this year’s peak of $2.22 per kg on March 27.”

The price decrease has been attributed to an increase in imports of crude oil resources to North Korea, despite the EU’s stated limits.

The Trump administration noticed these imports and called for the EU to analyze the situation, offering photographic evidence of the monthly imports.

The imports most likely are coming from China, as Jong-un recently met with Chinese President Xi Jinping.

U.S. officials sent a letter to the EU Council asking for increased security measures to avoid future imports. The U.S.’ letter to the EU reported deliveries of refined petroleum products to North Korea which occurred from early January to late May 2018. While the U.S.’ letter did not state the exact number of barrels which have been imported to North Korea, the letter did contain an estimate. The U.S. stated that North Korea could have imported 1.4 million barrels of refined petroleum products if their transport ships were 90% packed. UN sanctions allow countries to import up to 500,000 barrels.

Many images accompanied the U.S.’ report, which showed North Korean ships approaching the Nampo Port facility in the Taedong River. It is believed that these ships were going to deliver petroleum products obtained through a ship-to-ship exchange elsewhere.

The U.S. Secretary of State addressed these exchanges by stating:

Illegal ship-to-ship transfers are the most prominent means by which this is happening. Every UN member state must step up enforcement.”

North Korea’s recent actions have caused a rise in international skepticism regarding the country’s promise to denuclearize.

This skepticism was strengthened by recently leaked satellite images which showed North Korea making drastic developments to one of their nuclear facilities. The images showed an advancement in the facility’s plutonium production reactor as well as the construction of several support facilities.

Featured Image via Flickr/(stephan)