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US asks China to halt North Korea oil supply

14 Sep 2017, 9.21 pm GMT

US asks China to halt North Korea oil supply

Washington, 14 September (Argus) — The US administration still wants to persuade China to fully halt oil supply into North Korea — a step beyond tough sanctions the UN Security Council approved on 11 September.

The UN Security Council's Resolution 2375 freezes exports of crude to North Korea at current levels of 11,000 b/d and caps North Korea's imports of oil products at 5,500 b/d, starting in October.

Washington pushed for a total ban on exports of crude and products into North Korea to penalize Pyongyang over missile and nuclear tests, but China and Russia resisted the embargo.

"China supplies essentially all of North Korea's oil," US secretary of state Rex Tillerson said today. "I am hopeful that China, as a great country, a world power, will decide on their own and will take it upon themselves to use that very powerful tool of oil supply to persuade North Korea to reconsider its current path towards weapons development."

The cut in imports of products into North Korea would represent a 55pc decrease from the current levels, which the US State Department estimates at about 12,330 b/d. The US estimates oil imports into North Korea at 11,000 b/d and says China supplies most of that amount by pipeline.

Russian gasoil exports on board North Korean product tankers ground to a halt in the third quarter. North Korean gasoline imports from China collapsed to almost nil in July from an average of around 2,140 b/d in January-June.

President Donald Trump's administration has alternated between praising Beijing for helping implement stronger sanctions on Pyongyang and accusing China of insufficiently pressuring its neighbor.

The State Department initially praised Resolution 2375, describing it as the toughest measure the international community adopted against any single country. But Trump on 12 September described it as "just another very small step, not a big deal."

Tillerson said today that he shared that view and hoped China could do more. "We had hoped for a much stronger resolution from the Security Council."

The UN measure imposes a lid on North Korea's textile exports and prevents employment of North Korean guest workers in foreign countries, both important sources of revenue for the country.

North Korea's foreign currency earnings amounted to about $5bn/yr in recent years through exports of coal, textile, labor and weapons, according to David Cohen, who served as deputy CIA director in 2015-17.

Trump's approach of simultaneously pressuring Beijing on trade disputes, navigation in the South China Sea and other regional issues in addition to North Korea will not succeed, Cohen warned.

"We have a huge number of really important issues with China and you cannot pressure them on all those issues," Cohen said at a discussion hosted by the Georgetown University School of Law earlier this week. "My personal view is that we need to prioritize the nuclear issue and that means we have to let all the other stuff go."

Trump said today he will visit China in November, as part of a trip that also will take him to Japan, South Korea and Vietnam.

"We have a very good relationship with China and with the president of China. We are working on different things," Trump said.

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