Black Gold: Exposing North Korea's Oil Procurement Networks
Publisher: C4ADS
Author(s): James Byrne, Joseph Byrne, Lucas Kuo, and Lauren Sung
Date: 2021
Topics: Extractive Resources, Governance
Countries: North Korea, Taiwan
North Korea relies on the outside world to import fuel. With no demonstrated oil reserves and limited domestic refinery capacity, imports of refined petroleum products are vital to the regime’s stability and survival. As in all modern economies, energy — predicated on a constant flow of fuel into the country — underpins North Korea’s domestic and export economy, as well as Pyongyang’s capacity to train and field armed forces and develop weapons of mass destruction (WMD).
The international community’s efforts to cap North Korea’s oil and petroleum products imports in 2017 forced Pyongyang to adapt its fuel-procurement strategy. This report finds that North Korea has been engaging organized criminal networks and participating in a regional fuel smuggling market in violation of international sanctions, and that the nation is demonstrating increasingly sophisticated and previously unseen tactics to evade detection.
Even by conservative estimates, Pyongyang appears to have successfully bypassed fuel sanctions and exceeded the cap imposed by the United Nations Security Council (UNSC) each year since the introduction of the limit. Despite the challenges posed by the coronavirus pandemic and by North Korea’s restrictions on port traffic, analysis of high-resolution satellite imagery of oil terminals and import facilities suggests North Korea has once again breached the import cap in 2020. Through analysis of AIS data and satellite imagery, the authors found that the proportion of fuel deliveries to North Korean ports by foreign-flagged tankers is significant and has been increasing. This phenomenon raises important questions about the entities behind these sanctions violations, and it calls for scrutiny of how smugglers continue to evade detection and identification while transporting fuel within some of the most heavily monitored waters in the world.