Supply from Russia Driving Oil Prices down in North Korea

Reports from various media outlets are suggesting that the fall in oil prices in North Korea which started in November were due to supplies of petroleum coming from Russia.

Price of diesel had plummeted by 60% since early November while gasoline fell by 25%.

The claims are disconcerting in view of the sanctions imposed by the United Nations last September and intense pressure from the United States for U.N. member countries to cease trading activities with North Korea.

One of the resolutions drafted by the U.N. Security Council (UNSC) specifically called for the suspension of oil exports to the rogue regime.

The resolution banned exports of condensates and natural gas liquids to North Korea. It also pegged the supply of refined petroleum products to two million barrels per year.

Prices of oil in North Korea surged upward shortly after the UNSC passed and implemented the resolution tightening the supply of petroleum products.

Russia and China are known to have longstanding relations with North Korea. It is believed that fuel from Russia is delivered through North Korea’s Ryanggang province.

Ryanggang province lies near the border of China.

Lisa Collins from the Center for Strategic and International Studies shares her opinion Russia is taking advantage of the trading channels that have long existed between China and North Korea.

“There are a lot of trade channels that exist between China and North Korea; some licit and some illicit, so I wouldn’t be surprised if Russia were taking advantage of those.

“We do know that Russia has given North Korea some oil in the past, and I believe that there were some reports that North Korea was using ships to get around the Security Council sanctions that would hide the origin of the oil.”

As early as September, reports from reputable publications disclosed findings that Russia had been providing North Korea with fuel.

James Brown, an expert on Russia and Japan from Temple University believes Russia’s continued trade dealings with North Korea is its way of rejecting the U.S. government’s approach of applying collective pressure on Pyongyang.

“The Russian authorities are also generally against the U.S. policy of maximum pressure on North Korea, believing that the policy has caused Pyongyang to accelerate their nuclear and missile program.

“Instead of further sanctions, Moscow favours immediate dialogue with North Korea.”

Interestingly, at the same time the reports surfaced, Russian state media announced that the Kremlin is prepared to play a key role in pressuring North Korea to give up its nuclear program.

Russian Deputy Foreign Minister Igor Morgulov issued the following statement via Interfax:

“We have channels through which we are conducting a dialogue and we are ready to deploy them. We are ready to exert our influence on North Korea.

“We believe that the isolation alone will not work; this won’t take us forward. By doing this, we will only worsen the situation which is dangerous. We are really on the brink of a real war.”

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