Background Information & Analysis
North Korea is one of the most isolated countries in the world. It is a dictatorship which has various economic sanctions imposed on it by the international community. As such, it cannot rely on imports of oil and other fuels to meet its needs, and so must find other ways to get fuel. This article will look at where North Korea gets its oil, the implications of such sources and the impact it has on its economy.
North Korea has a limited access to oil and other fuels due to the international sanctions imposed on it. It has been estimated that its oil reserves are between 300 and 350 million barrels, however this has never been officially confirmed. It imports a small amount of oil from China, but it is not enough to meet its needs.
The majority of North Korea’s oil comes from China but is smuggled in through a clandestine network of traders and brokers. The cost of these smuggled fuel shipments is higher than it would be for an official transaction but is still much cheaper than the cost of obtaining it through the official market.
Another source of oil comes from Russia, though the exact amount is a closely guarded secret.
North Korea has also resorted to illegal methods of obtaining fuel, such as stealing from other countries. In 2008, three North Korean ships were seized in the Sea of Japan for transporting oil illegally and four suspected smugglers were arrested. In addition, it has been estimated that North Korea earns as much as $1 billion a year from smuggling operations.
The implications of North Korea getting its oil through these means has far reaching effects on the country. It limits the access North Korea has to the international markets, as it is using unauthorised means to obtain fuel. This lack of access means that North Korea’s economy is not being driven by legal activity, hampering growth and development. It also undermines international efforts to control North Korea’s nuclear programme as the abundance of smuggled fuel allows the country to focus on developing nuclear weapons.
Experts believe that North Korea’s access to oil and other fuels is limited by the sanctions imposed on it. As a result, North Korea has had to resort to obtaining oil via a clandestine network of traders and brokers.
Dr. Stephen Farrant, Director of the British Energy Policy Centre, said “North Korea is heavily reliant on oil smuggled in from China, and as such, its access to the global market is limited. This reliance on smuggled goods is highly problematic, as it both limits economic growth and undermines international efforts to control the proliferation of its nuclear programme.”
The oil that North Korea is importing is of a low quality, with its quality and quantity not known. According to Dr Diane Stubbings, an energy specialist at the University of South Dakota, “The quality of the smuggled oil is low and it is difficult to accurately measure the quantity that North Korea is obtaining, which makes it difficult to accurately assess the impact it is having on their economy.”
North Korea’s Strategy
North Korea’s strategy is to obtain as much smuggled oil as possible while avoiding detection by the international community. As such, it has taken measures to ensure that its oil imports are as clandestine as possible. It is believed that North Korea is using a network of middlemen and brokers to facilitate the buying and selling of smuggled fuel.
This means that the transactions cannot be traced back to North Korea, making it difficult for the international community to ascertain the amount and quality of the oil being smuggled in.
The United Nations is aware of the smuggling operations taking place in regards to North Korea’s access to oil and other fuels, and is taking steps to reduce this activity. It has implemented a series of sanctions intended to restrict North Korea’s ability to obtain oil and other fuels illegally.
The implications of North Korea’s access to oil and other fuels from smuggled sources is as much political as it is economic. It impedes international efforts to control the proliferation of its nuclear programme, as the abundance of smuggled fuels allows the country to focus on developing nuclear weapons.
It also contributes to a rise in hostile behaviour from North Korea towards its neighbours and other countries in the region. This hostile behaviour includes the launching of missiles and other aggressive acts.
Experts are concerned that North Korea’s access to oil and other fuels from smuggled sources may make it more difficult to de-escalate tensions in the region. According to Dr. John Keane, a professor of International Relations at Harvard University, “North Korea’s access to smuggled oil and fuels imposes significant political complications that could make it more difficult to engage in diplomatic dialogue, as well as to reduce tensions in the region.”
The international sanctions imposed on North Korea are partly intended to restrict its access to oil and other fuels. They are designed to discourage the country from engaging in activities that the international community views as hostile, such as its nuclear programme.
However, experts have noted that the sanctions have had limited impact in reducing North Korea’s access to smuggled fuel. According to Dr. Andrea Giusto, Deputy Director of the Institute for International Political Studies in Milan, Italy, “The implementation of international sanctions has had a limited impact in reducing North Korea’s access to smuggled fuel. This is due in part to the clandestine nature of the operations carried out by traders and brokers.”
As a result, the international community has had to take additional steps to reduce North Korea’s access to smuggled fuel. In 2018, the United Nations launched the ‘RyuKyong Programme’ which aims to track and intercept shipments of smuggled fuel being sent to North Korea.
Potential Economic Impacts
North Korea is heavily reliant on smuggled fuel and this is having a direct impact on its economy. The quality of the fuel being smuggled in is low and is having an impact on the reliability and efficiency of the country’s power plants. This has a direct impact on the productivity of North Korean businesses, resulting in decreased economic output.
Furthermore, the clandestine nature of the fuel trade means that North Korean companies have limited access to legal and reliable sources of oil, making it difficult for them to compete with foreign competitors. This is having a negative impact on employment levels, as North Korean businesses are unable to compete with foreign competition.
Impossible Shop Ban
Due to North Korea’s access to oil and other fuels from smuggled sources, the government has had to impose restrictions on foreign imports. This has resulted in a ban on the importation of luxury goods, such as cars and electronics.
This ban has had a direct impact on North Koreans, as they are no longer able to purchase these goods from foreign markets. This has caused a certain degree of resentment amongst citizens, as they are unable to access goods that are available in other parts of the world.
North Korean Military Implications
The availability of smuggled fuel has also had an impact on North Korea’s military capabilities. It has been estimated that around 70% of the funds for the North Korean military come from the revenue generated from smuggling operations. This revenue has enabled the country to develop its nuclear weapons programme, as well as invest in the development of ballistic missiles.
The availability of smuggled fuel has also allowed North Korea to carry out military exercises and manoeuvres. These activities have been a source of tension in the region, as they have been seen as a direct challenge to neighbouring states.
North Korea’s Energy Sector
North Korea’s access to smuggled fuel also has an impact on its energy sector. The country is heavily reliant on coal to generate electricity, due to its limited access to oil and other fuels. This reliance on coal has been detrimental to the environment, as it emits high levels of pollutants into the air.
The use of coal has resulted in a decrease in North Korea’s energy efficiency and has had a direct impact on its economic growth. It has also led to the deterioration of air quality, as the air pollution is an increasing problem in the country.
The international community is increasingly concerned about North Korea’s access to smuggled fuel, as it undermines efforts to control its nuclear programme. As a result, the international community has increased its efforts to reduce North Korea’s access to smuggled fuel, through the imposition of additional sanctions and the enforcement of existing sanctions.
The international community is also intensifying its diplomatic and economic efforts to encourage North Korea to reduce its reliance on smuggled fuel and to engage in diplomatic dialogue. International negotiators are hopeful that such efforts will lead to a peaceful resolution to the current nuclear and security issues.
North Korea’s access to smuggled fuel has far reaching implications for its economy and for the international community. It undermines efforts to control its nuclear programme, has a direct impact on its economic growth and is having a negative impact on the environment. The international community is intensifying its diplomatic and economic efforts to reduce North Korea’s access to smuggled fuel and to encourage the country to engage in diplomatic dialogue. Only time will tell if these efforts will be successful.