A Reuters report from Beijing said that the China National Petroleum Corporation had suspended sales of fuel to North Korea over concerns that that the company will not get paid, as pressure mounts on Pyongyang to rein in its nuclear and missile programs. Refined fuel purchases are paid for in advance.
Analysts, still not mounting expectations that the fuel cut is meant to hold until the situation changes on the ground, as this had not been confirmed by the company or Chinese government officials, said it was not clear how long the suspension would last.
It was clear that a prolonged cut would threaten critical supplies of ready fuel and force the Pyongyang authorities to seek alternatives to its main supplier of diesel and gasoline. The move arose from intensive scrutiny of close commercial ties that link China with North Korea, as pressure mounts on isolated Pyongyang.
CNPC made efforts to dress up the situation as strictly commercial, but analysts were quick to point out that reduced ability by North Korea to pay upfront for its refined fuel purchases arose from reduced purchases of coal from North Korea.
In |February, Beijing suspended coal purchases until the end of the year, cutting off North Korea’s main export revenue source, as in 2016 North Korea sold 22.5 million tons of coal to China fetching it $1.9billion. Sources said that crude oil exports to via an ageing pipeline had not been reduced, put at around 520,000 tons per year and worth about $170 million at market prices, which Pyongyang can pay.
US analysts said that North Korea’s unprecedented pace of nuclear and ballistic missile tests had prompted China, which handles 90 per cent of North Korea’s trade, to start squeezing Pyongyang.
The United States has been pressing China to exert more economic and diplomatic pressure on North Korea but Beijing has been insisting that its influence on Pyongyang was limited. Now the US was looking at a raft of sanctions against Chinese companies that trade with North Korea while the threat it poses on security in the Far East and world peace was steadily on the rise.
President Donald Trump, frustrated over Beijing’s inaction on North Korea and bilateral trade issues, was considering possible sanctions, and as China supplies around 90 per cent of North Korea’s fuel needs, little room for prevarication existed.
In that sense Beijing was pressurizing North Korea to at least maintain a visible moratorium on nuclear and missile tests or start talking about such a move, as otherwise the US could cut China’s access to certain US markets, or withdraw insurance cover for US firms trading in China. Beijing thus moved to shield itself.
The result of the suspension of refined fuel sales was sharply rising prices in Pyongyang, with Reuters citing analysis of data collected by a North Korea defectors’ website in Seoul showing the price of gasoline sold by private dealers in Pyongyang and the northern border cities of Sinuiju and Hyesan had hit $1.46 per kg on June 21. This was a rise of nearly 50 per cent from April 21 with the data indicating that prices had remained relatively stable since late last year, until now.
At the same time the Trump administration was looking at imposing a travel ban for US citizens to North Korea in the wake of the death of student Otto Warmbier, an American college student who was in a coma when he was released by North Korea.
He died the same week after being returned to the US, thus administration officials are seeking ways to stop travel to North Korea completely so as to reduce chances of the rogue state in Pyongyang to capture other US citizens on top of those it detains, to exercise pressure on Washington. No measures were imminent.
Analysts say that Secretary of State Rex Tillerson is empowered in law to cut off travel to North Korea by simple fiat, as North Korea regularly detains US citizens visiting there, to extort payments for their being released after being slapped with charges like subversion.
The US establishment faces pressure on the matter but there is no consensus that travel to North Korea simply be prohibited, as Congress wants a more voluntary approach to the issue. If a ban is imposed, travel would be criminalized, with sentencing to a fine and up to ten years imprisonment on return.
In his usually unpredictable manner, President Trump appeared to lay blame on the Obama administration for the fate of the deceased student, saying in remarks at the Oval office that “frankly, if he were brought home sooner, I think the result would have been a lot different.” North Korea had claimed that the former administration “never asked for his release,” as if that would have been without conditions, nearly amounting to ransom.
It would ask for statements as to not interfering in the DPRK social system as its state media usually describes despotic rule by the Kim dynasty.
The Chicago Tribune underlined that under existing law, all it would take is a designation by Secretary Tillerson of a geographic travel restriction, to make all American passports invalid for travel in North Korea.
“To back up the designation, Tillerson could assert that Americans face imminent danger to their health or safety if they travel there,” saying this is an easily defendable assertion in the wake of Warmbier’s death.
Leading Republican (Arizona) legislator, Senator John McCain, a former presidential candidate, said “if people are that stupid that they still want to go to that country, then at least they assume the responsibility for their welfare.” He didn’t propose total ban, but sign a document they know the dangers.
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