US imposes new sanctions on North Korean oil, coal trade

Washington (Platts)--22 Aug 2017 543 pm EDT/2143 GMT

The Trump administration on Tuesday announced new sanctions in response to North Korean nuclear and ballistic missile tests, including penalties aimed at shutting down coal and oil flows into and out of North Korea.

The Department of the Treasury's Office of Foreign Assets Control designated 16 companies and individuals accused of supporting North Korea's nuclear and missile programs and participating in North Korean energy trades.

Related Capitol Crude podcast episode: 'Sanctions can work': Obama's top energy diplomat on the nuances of US oil, gas policy

"Treasury will continue to increase pressure on North Korea by targeting those who support the advancement of nuclear and ballistic missile programs, and isolating them from the American financial system," Treasury Secretary Steven Mnuchin said in a statement.

The sanctions come amid increasing global pressure to isolate North Korea, including a embargo on oil flows into the country.

Article continues below...

Request a free trial of: Oilgram NewsOilgram News
Oilgram News

Oilgram News brings you fast-breaking global petroleum and gas news on and including:

  • Industry players, upstream and downstream markets, refineries, midstream transportation and financial reports
  • Supply and demand trends, government actions, exploration and technology
  • Daily futures summary
  • Weekly API statistics, and much more
Request a free trialMore Information

In Seoul Tuesday, a US congressional delegation, including Senators Ed Markey, Massachusetts-Democrat, and Chris Van Hollen, Maryland-Democrat, called for a ban on energy exports from China and Russia to North Korea, according to a report from NK News.

"North Korea's trading partners must intensify and enact pressure to bring North Korea to the negotiating table: that starts with getting China to cut off the flow of oil to North Korea," Markey said, according to the report.

China, North Korea's top oil supplier, does not report oil shipments to the country, but exports have declined dramatically since the end of the Cold War. North Korea's oil consumption averaged 76,000 b/d in 1991 and had fallen to 15,000 b/d in 2016, according to an Energy Information Administration report.

"Some estimates report that North Korea imports about 10,000 b/d of crude oil annually, all of which is sent to the country's sole operating refinery, the Ponghwa Chemical facility, located on its border with China," EIA said.

Related: Find more content about Trump's administration in our news and analysis feature.

Treasury on Tuesday sanctioned three Chinese coal companies -- Dandong Zhicheng Metallic Materials, JinHou International Holding and Dandong Tianfu Trade, which the agency said had imported nearly $500 million worth of North Korean coal between 2013 and 2016.

Coal trade generates more than $1 billion each year for North Korea, Treasury said. The UN Security Council passed a resolution August 5 banning North Korean coal exports.

Treasury also designated three Russian individuals -- Mikhail Pisklin, Andrey Serbin and Irina Huish -- and two companies based in Singapore, Transatlantic Partners and Velmur Management, for their role in providing fuel oil to North Korea.

"Both of these companies have attempted to use the US financial system to send millions of dollars in payments on behalf of North Korea-related transactions," Treasury said in a statement.

--Brian Scheid,

--Edited by Keiron Greenhalgh,

Copyright © 2018 S&P Global Platts, a division of S&P Global. All rights reserved.