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Irina Slav

Irina Slav

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

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North Korean Oil Smugglers Elude U.S. Military

North Korea is still receiving crude oil shipments despite the military presence of a U.S.-led coalition deployed to ensure UN sanctions against Pyongyang are being enforced. This was revealed in a top secret report, NBC News reports, citing U.S. government officials familiar with the document.

Under the latest United Nations Security Council sanctions regarding oil sales to North Korea from December 2017, North Korea is allowed to import a maximum aggregate amount of 500,000 barrels of all refined oil products for 12 months beginning on January 1, 2018. The sanctions also introduced a limit of 4 million barrels—or 525,000 tons—per a twelve-month period as of 22 December 2017 for the supply, sale, or transfer of crude oil to North Korea.

However, according to the report, more oil is going into the country after ship-to-ship transfers at sea. After the deployment of the military vessels in the area, however, the North Koreans have changed tactics, conducting the transfers further out at sea, sometimes in foreign territorial waters. Warships and surveillance aircraft were deployed near the Korean Peninsula in September, but since the aircraft has a certain range it can’t exceed, moving the tankers further into the sea has worked to avoid detection.

Another tactic employed by the North Koreans is using small boats to transfer oil from vessel to vessel. Smaller boats, NBC News notes, are harder to detect by the surveillance gear. In other words, despite the military efforts of the United States and its partners in the coalition, it seems that the Pyongyang regime is still getting more oil than the limit agreed under the UN sanctions.

Earlier this year, in a report to the UN, Washington said North Korea received at least 759,793 barrels of oil products between January 1 and May 30, well above the 500,000-barrel annual quota. The supplies were being made via ship-to-ship transfers with North Korean tankers that have called in port at least 89 times, the United States said in July. The United States also accused China and Russia of continuing to sell oil to North Korea.

At the time, Moscow and Beijing both rebuffed the U.S. claim they were helping Pyongyang to skirt UN sanctions, effectively blocking the United States’ effort to cut all supplies of oil and oil products to North Korea. Related: Why Iran’s Positive OPEC Spin Won’t Last

One Russian company is now facing bankruptcy because the U.S. sanctioned it on allegations of shipping crude to North Korea. The U.S. Treasury blacklisted six vessels from Gudzon Shipping’s fleet, accusing it of participating in ship-to-ship transfers of oil for North Korea. These vessels have been stranded in South Korea for a month now because the sanctions apparently cover bunkering fuel and the port authorities have refused to fuel all vessels but one, which has left for home.

So, it seems that despite Washington’s best efforts, North Korea is getting enough oil to keep going. Things may begin to change but slowly, the NBC sources said. Already the presence of the coalition in the East China Sea has prevented 30 ship-to-ship transfers since October last year.

"We've increased pressure and have been collecting information on these illicit transfers and then feeding them back to our interagency partners for financial, law enforcement and diplomatic action," one of the sources said.

It’s evident the U.S. will not release its stranglehold on North Korea even though President Trump said in a tweet following the release of the NBC report that work is being done on the diplomatic front as well in the spirit of mutual benefit.

By Irina Slav for Oilprice.com

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