WTI Crude

Loading...

Brent Crude

Loading...

Natural Gas

Loading...

Gasoline

Loading...

Heating Oil

Loading...

Rotate device for more commodity prices

China Ready To Cut Oil Supplies To North Korea

Oil tanker Asia

Beijing’s patience with North Korea is wearing thin as Pyongyang continues to conduct nuclear missile tests. According to a state Chinese media outlet, Huanqui, China is considering a suspension of its crude oil exports to its neighbor should North Korea conduct a sixth nuclear test.

North Korea depends on China for 90 percent of its crude oil supply, and stopping these will wreak havoc on the dictatorship, which China has been trying to avoid, since a regime collapse is likely to result in a massive influx of refugees. It has also opposed President Trump’s urging to penalize North Korea for the nuclear tests so far, but now it seems the mood is changing – having another nuclear neighbor is hardly China’s idea of a stable regional environment.

Asia’s biggest economy also has other ways to make Kim Jong Un give up nuclear tests, such as stopping or reducing the food aid it sends to the impoverished nation, or cutting North Korean foreign currency transactions that go through Chinese banks.

The White House meanwhile has sent “an armada” to the Korean peninsula, and is now mulling over measures such as an oil embargo, a ban on the country’s only airline, and interception of ships carrying cargo to North Korea. Also among the measures being considered is penalizing Chinese banks doing business with Pyongyang. Related: Oil Markets Turn Bullish Amid Spiking Geopolitical Risk

Last year, a Korean media outlet described the most likely scenario for the country, should China halt crude oil supplies. The whole nation would be paralyzed in this scenario, from government agencies to the military to production.

Alternative supplies are not really an option: although Russia and some Middle Eastern producers have from time to time sent crude North Korea’s way, they are unreliable suppliers, the outlet noted, especially now, when U.S.-Russian relations are at such a low point over Syria.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment
  • JACK MA on April 18 2017 said:
    Does anyone here remember what happen when we cut off oil to Japan. They bombed Pearl Harbor
  • Rebecca on April 20 2017 said:
    @Jack Ma - No, I don't remember that. I'm too young.

    Does anyone remember what happened to Japan after they bombed Pearl Harbor?
  • willie on April 20 2017 said:
    Obviously that didn't matter--Japan continued the war, getting oil from other sources - for 4 yrs!
  • meh on May 02 2017 said:
    remember that pearl harbor was not a surprise attack
  • The Big Show on May 16 2017 said:
    Now Kim has turned to Putin for protection. That must make China very happy.
  • RIichard Roberts on May 21 2017 said:
    We need through the UN make China whole by ensuring that a market*will be found for oil that would otherwise go to North Korea...and further ensure that no other member country will make up the
    Korean shortfall...



    *. Other markets could include..Vietnam,Laos and Cambodia. A nice way to make some sense of that horrible war

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News