WTI Crude

Loading...

Brent Crude

Loading...

Natural Gas

Loading...

Gasoline

Loading...

Heating Oil

Loading...

Rotate device for more commodity prices

China, U.S. Mull Plans to Halt Coal & Oil Shipments to North Korea

Tanker

The U.S. and China are discussing measures to contain North Korea’s nuclear drive, after the country announced its fifth nuclear missile test in early September. The options on the table involve limiting North Korea’s access to coal, oil, and iron ore—most of which it gets from China.

According to UN Security Council sources who wished to remain unnamed, other members of the Council are also considering action against the dictatorial state, which they will enforce after the Security Council takes its own actions against North Korea.

The bilateral negotiations between Washington and Beijing are extremely important, as both nations have veto power over Security Council resolutions. The U.S. has pushed for years for stricter sanctions against North Korea, trying to force Kim Jong Un’s regime to give up its nuclear ambitions.

This, however, has proved futile so far without the explicit support of China, which accounts for about 70 percent of North Korean imports, including the bulk of its energy and food. Until now, China has been reluctant to support more radical measures, because it is uncomfortable with U.S. and South Korean troops in-country, on the China/North Korea border. A humanitarian crisis in North Korea is also something Beijing has wanted to avoid.

According to a Chinese analyst, Shi Yongming from the China Institute of International Studies, it would be impossible to completely shut off North Korea’s access to coal and oil, but if Beijing is willing, access to these essentials could be significantly reduced.

Related: OPEC Deal: Is $60 Oil Before Christmas Possible?

This March, after another nuclear missile test, the UN Security Council imposed fresh sanctions on the Pyongyang regime, curbing its trade substantially, allowing only for the imports of goods needed for emergencies and livelihood. This loophole has allowed the regime to remain standing so far.

Bloomberg received confirmation from China’s Foreign Ministry that there were ongoing discussions regarding North Korea, but its sources declined to supply any details. It remains unclear if the bilateral negotiations will end with an agreement for joint action or not.

Some analysts have suggested an alternative path: that of direct negotiations with Pyongyang. Sanctions, they argue, have proven to be utterly ineffective, and that it is now time to change the approach before North Korea becomes a regular member of the nuclear club.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

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