A Chinese state-owned oil and gas company has reportedly suspended fuel sales to North Korea, according to inside sources.
A top Chinese state-owned oil and gas company has reportedly suspended fuel sales to North Korea, according to inside sources.
China National Petroleum Corp has decided to put fuel sales on hold because doing business with Pyongyang is “no longer worth the risks, ” sources with direct knowledge of the situation told Reuters. Regular compliance checks to determine whether a company or firm is in violation of sanctions are increasing the pressure, especially in China, which accounts for almost 90 percent of all North Korean trade. Furthermore, North Korea is often an unreliable business partner, as firms frequently fail to pay for goods and services.
Reuters speculated that Chinese companies may be facing credit crises as Chinese and international banks address sanctions compliance issues but was not able to confirm.
Neither Beijing nor CNPC have acknowledged the sales suspension, with a Ministry of Foreign Affairs spokesman commenting that he was no aware of the situation when reporters questioned him.
CNPC is one of China’s leading energy companies, and it provided the vast majority of the fuel sold to North Korea last year. China sent 96,000 tons of gasoline and 45,000 tons of diesel collectively worth $64 million to North Korea in 2016 for civilian and military purposes.
Data for fuel shipments to North Korea, as well as rising fuel prices in the North, suggest that China may be cutting the supply.
China suspended coal shipments to North Korea in February and reportedly played an active role in convincing North Korea not to conduct another nuclear test, but there is more that can be done.
