Background Information
North Korea, officially known as the Democratic People’s Republic of Korea (DPRK), is a highly mysterious and isolated country due to its stringent government regulations. Attracting little investment, its economy is highly suspicious with no reliable figures being available. Its main resources within the agricultural and industrial spheres is coal and iron ore. Yet when it comes to North Korea’s energy sources, North Koreans not only rely heavily on imports, but the question arises of where that oil comes from.
Sources of Oil
China and Russia have traditionally been North Korea’s two main crude oil suppliers, followed by France and a handful of other countries. China provides the majority of North Korea’s oil imports and it is estimated that between 50 and 90 percent of North Korea’s crude oil imports come from China. This has been the case for many years and is likely to remain so in the coming years.
Russia has become increasingly important for North Korea’s oil needs. In 2018, Russia provided roughly one-third of North Korea’s crude oil imports, making it the second-largest source of crude oil for the isolated country. However, the proportion of imports from Russia is likely to decline in 2020, as a new oil pipeline between Russia and North Korea has been completed.
France is North Korea’s third-largest source of oil. The country has a long-standing commercial relationship with North Korea and has been providing the country with crude oil since 2016.
The United States is also a source of crude oil for North Korea, though the amount provided is minimal. While the U.S. isn’t a major supplier of crude oil to North Korea, it is estimated that North Korea imported some 37,000 barrels of crude oil from the U.S. in 2018.
Sanctions Impact
One of the biggest challenges for North Korea is the international sanctions imposed on it by the United Nations. These sanctions have restricted North Korea’s ability to import oil from the outside world. As a result, North Korea has had to rely on its own resources or find alternative sources of oil.
To circumvent the sanctions, North Korea has sought to expand its relations with other countries in the Middle East such as Iran, Qatar and the UAE in order to claim additional sources of crude oil. In addition, North Korea has also developed a network of companies and brokers, who have found ways to secure oil supplies from Africa, Latin America and other regions.
Other Energy Sources
Though oil is an important source of energy for North Korea, the country still relies heavily on other, non-oil sources of energy. North Korea has limited access to natural gas and, as a result, relies heavily on coal and wood for heat and electricity in the winter.
In addition, North Korea is investing in alternative sources of energy such as nuclear power and solar energy. For example, North Korea is building an additional reactor at the Yongbyon Nuclear Scientific Research Centre and is also expanding its solar infrastructure, using solar photovoltaic panels.
Political Impact of Oil
Though North Korea has heavily relied on oil imports from China and Russia, this reliance has also had a political impact on the isolated country. North Korea has had to make concessions to secure oil imports from its allies, thus giving these countries political leverage over North Korea.
The United States has also used the North Korean oil trade as a tool to pressure the country into giving up its nuclear weapons. In 2018, the U.S. imposed sanctions on a Chinese company and two individuals for providing crude oil to North Korea. These sanctions were a clear warning to North Korea’s suppliers that the U.S. would not tolerate further violations of the UN’s sanctions regime.
Economic Significance
For North Korea, oil is of huge economic significance. Despite its sanctions, North Korea has managed to secure enough oil to sustain its economy, as well as its military. Moreover, despite the increase in the price of oil globally, North Korea has been able to keep its oil prices relatively low due to the fact that its oil imports come from its allies.
Oil also plays an important role in North Korea’s efforts to modernize its infrastructure and industrialize parts of the country. North Korea is using oil to develop its agricultural and industrial sectors and to expand its road infrastructure.
International Relationships
North Korea’s reliance on oil imports has inevitably changed the nature of its international relationships. China, Russia, and to a lesser extent, the United States, have become key players in North Korea’s oil trade. North Korea’s need for crude oil imports has made it more reliant on its allies, as well as more vulnerable to the whims of the international community.
Oil has thus become a tool for North Korea’s allies, such as China and Russia, to exercise their influence over North Korea. These countries have used their power to influence North Korea’s policies and to push for the denuclearization of the Korean Peninsula.
Oil Imports and the Environment
As a result of North Korea’s reliance on oil imports, the country has also become increasingly vulnerable to environmental damage caused by oil spills and excessive emissions. In 2017, a Chinese tanker spilled over 7,5000 tons of crude oil off the coast of North Korea, causing massive damage to the ecosystem.
Moreover, North Korea’s heavy reliance on oil has meant that it has been slow to adopt renewable energy sources and the country lags behind its regional neighbours in this regard. North Korea’s lack of access to clean energy sources means that it is highly dependent on oil and unable to benefit fully from the shift to renewable sources of energy.
Conclusion
Overall, North Korea’s dependency on oil imports has both economic and political consequences. North Korea is reliant on its allies to provide it with crude oil and is thus economically and politically vulnerable. Moreover, its heavy reliance on oil has had a damaging impact on its environment and has prevented it from taking full advantage of the shift to renewables.
