[Editor's note: We gratefully acknowledge the special contribution of this paper,
courtesy of Larry Niksch to ICAS. sjk]
Succeeding in Securing an Oil Cutoff of North Korea
Larry Niksch 1
The latest sanctions against North Korea, approved by the United Nations Security
Council, drew a less than optimistic appraisal from President Trump, who doubted that
this new round of sanctions would force North Korean leader, Kim Jong-un, to pull back
his program to develop and produce an arsenal of inter-continental ballistic missiles
(ICBMs) with nuclear warheads that can reach the United States. The President no doubt
is correct. Banning textile exports and new contracts for North Korean overseas workers
will not inflict significant pain on the North Korean regime going into 2018. It is within
these months, going into 2018 that the North Korean regime will move the nuclear ICBM
program into a final stage before fully developing this weapon and starting to produce an
arsenal of them. North Korea’s string of successful missile and nuclear tests since May
make credible the estimate of the U.S. Defense Intelligence Agency (as reported in the
Washington Post) that North Korea will accomplish this in 2018. We likely will see this
final stage unfolding in late 2017 or early 2018 with North Korea test firing two or three
ICBMs over Japan far out into the Pacific Ocean, landing as close as 200-300 miles off
the U.S. west coast.
The big difference in the last round of sanctions was the introduction by the United States
of an initial resolution that included a U.N.-mandated cutoff of oil to North Korea.
Subsequent negotiations with China and Russia resulted in the deletion of the oil cutoff
provision. The initial U.S. resolution came after Japanese Prime Abe and South Korean
President Moon both endorsed a cutoff of oil to North Korea. Secretary of State Tillerson
spoke openly about the need for an oil cutoff.
This shows the recognition that an oil cutoff sanction would inflict the most immediate,
severest pain on the North Korean regime, the North Korean elite, and the North Korean
military. Scott Bray, of the U.S. Office of the Director of National Intelligence, stated on
June 26 at an Institute for Corean-American Studies seminar that an oil cutoff would have
“remarkable consequences” for North Korea. Justin Fendos, a Chinese scholar with the
Chinese National Academy of Sciences and Fudan and Dongseo universities, wrote in the
Pacific Forum’s PacNet of August 30 that “a cessation [of oil] would ruin North Korea,”
especially in winter. There is no doubt that an oil cutoff would cripple North Korea’s
civilian transportation system including food deliveries to Pyongyang, worsen electricity
shortages even to Pyongyang, and begin to diminish the military’s gasoline and aviation
fuel. In April 2017, Global Times, a leading Chinese Communist Party newspaper,
editorialized that China should cut off oil to North Korea if North Korea conducted
another nuclear test. China supplies North Korea with about 90 percent of its oil.
Nevertheless, the outcome of the negotiations over the latest round of U.N. sanctions
shows continued Chinese and Russian resistance to an oil cutoff. This resistance comes
amidst several reports of stepped up Russian shipments of oil to North Korea, sometimes
through clandestine means.
Thus, with the oil cutoff issue now in the open, the challenge for the Trump
Administration is to develop an effective diplomatic strategy that would increase the
difficulty for China and Russia to oppose an oil cutoff. This will require the
Administration to correct current flaws in its approach.
First, several reports and statements by Secretary Tillerson indicate that the Trump
Administration has believed or hoped that China would volunteer to cut off oil or cut off
oil secretly, without announcement. U.S. officials probably have encouraged China to
cut off oil unannounced. This goes against Chinese policy since the opening of six party
talks in 2003. China never has volunteered to undertake measures that would inflict
severe pain on North Korea. Also, U.S. emphasis on a secret Chinese oil cutoff omits the
potential importance of Russia in the oil equation.
Second, the latest U.S. proposed resolution in the Security Council placed an oil cutoff
among several measures of sanctions. This followed the pattern of U.N. resolutions since
the first ones in 2006. U.S. proposals for multiple sanctions give the Chinese and
Russian negotiators increased bargaining power to mix acceptance of some U.S.
proposed sanctions with opposition to others, usually opposition to the stronger U.S.
proposals. The result consistently has been final Security Council resolutions weaker—
sometimes considerably weaker—than the original U.S. version. The deletion of an oil
cutoff from the latest Security Council resolution falls into the considerably weaker
category, as President Trump seems to realize.
Third, and related, the Trump Administration has followed the preference of the Bush
and Obama administrations for secret diplomacy in negotiating U.N. sanctions. This near
total emphasis on secret negotiations has given the Chinese and Russians a greater ability
to oppose stronger sanctions, including an oil cutoff. The absence of any transparency of
these negotiations removes a potential source of public exposure and resultant pressure
on China and Russia. Their real positions remain hidden from their own publics. This
flaw is exacerbated by the habit of U.S. officials to praise the “unified front” of China
and Russia with the United States and exaggerate the actual strength of approved
sanctions.
Fourth, successive U.S. administrations have over-emphasized the goal of cutting off
financial inflows to North Korea, which I believe has delayed a concentration on securing
an oil cutoff sanction. The failure of sanctions since 2006 has resulted from the inability
of numerous financial sanctions to inhibit substantially North Korea’s ability to operate
secretly through financial institutions in China and other countries to conclude
transactions and move money from these to North Korea. The failure also is the result of
sanctions having no effect on the flow of Iranian money to North Korea that finances the
nuclear and missile collaboration between Tehran and Pyongyang. The
Washington Post
reported on September 1 “a forthcoming report from the U.N. panel of experts on North
Korea,” asserting that North Korea “continues to flout the arms embargo and robust
financial and sectoral sanctions, showing that as the sanctions regime expands, so does
the scope of evasion.”
Fifth, in finally proposing an oil cutoff, the Trump Administration appears not to be
considering negotiating with China and Russia on the sole U.S. proposal of an oil cutoff
but linked, not to other sanctions proposals, but instead to measures on North Korea that
China and Russia have proposed that the United States conceivably accept without
jeopardizing fundamental U.S. security interests.
Suggestions for a Revised Trump Strategy
A revised Trump Administration strategy would need to do two things: correct the above
cited flaws and produce an oil cutoff by early 2018 to have any chance of forcing Kim
Jong-un to pull back his nuclear ICBM program. The following are measures that, it
seems to me, could be more effective for the United States.
- Set an early internal deadline for China to adopt an unannounced oil cutoff, probably
in October or November.
- If China does cut off oil unannounced, insist to Russia that it must follow China’s
lead.
- If China does not act, submit a resolution to the U.N. Security Council that contains
solely a mandated oil cutoff, no other sanctions. Notify Security Council members that
the United States wants a formal vote on its resolution.
- Offer China and Russia two measures that they say they want, in return for their
agreement to an oil cutoff. The two measures would be a U.S. return to six party talks
without conditions and a suspension of operation of the THAAD missile defense system
in South Korea for at least one year. The Trump Administration could propose to China
that it call a six party meeting in Beijing. A reopening of six party talks in the context of
an oil cutoff would put the United States, South Korea, and Japan in a position of strength
to propose and pressure North Korea for concessions on its nuclear and missile programs,
including its existing Nodong missiles with nuclear warheads. A suspension of operation
of the THAAD system for one year would run only a low risk of a North Korean attack
on South Korea. The THAAD batteries would remain in place and could be started
immediately if signs of an attack arose. Moreover, it is doubtful that Kim Jong-un would
risk an attack on South Korea before he had a full arsenal of nuclear warheaded ICBMs
capable of reaching the United States. Assuming that he could begin to produce an
arsenal in late 2018, he likely would need a year or longer before he would have an
arsenal that he would consider adequate. That gives the Trump Administration time
space to make such a proposal to China and Russia.
- Publicize highly the proposed U.S. oil cutoff resolution and the U.S. quid pro quo
offers to China and Russia. In short, abandon the emphasis on secret negotiations.
Concentrate publicity on the informed public in China where there is growing criticism of
North Korea. This could bring about a real debate in China and within the Chinese
Government over how China should respond to the U.S. proposal of a compromise deal.
High publicity could have a similar impact in Russia. It is doubtful that Russia would
continue to oppose an oil cutoff if China agreed to a cutoff.
- Warn the Chinese and Russian governments, first privately, that if they reject an oil
cutoff, despite the U.S. offer of a quid pro quo deal, that the U.S. Treasury Department
will begin to impose financial sanctions against Chinese and Russian enterprises which,
the U.S. Government knows, are doing business with North Korea; and that the first
enterprise to be sanctioned will be China’s National Petroleum Corporation, which
supplies North Korea with most of its oil.
If China and Russia still opposed an oil cutoff despite this U.S. strategy, the Trump
Administration at least would know thoroughly that China and Russia (especially China)
will not cooperate diplomatically through sanctions to force Kim Jong-un to pull back his
nuclear missile program. The Trump Administration then could move to develop an
alternative strategy toward North Korea in 2018 and beyond that relied less on Chinese
input and would be less influenced by Chinese diplomatic opposition.
An Oil Cutoff Within the Countdown to a North Korean Arsenal of
ICBMs
The countdown to a fully developed North Korean ICBM in 2018 makes urgent this kind
of diplomatic strategy. An oil cutoff is the only sanction that would inflict immediate
severe pain on the North Korean regime and thus would have a chance to force Kim
Jong-un to pull back his ICBM program. Admittedly, there is only a chance of success;
but without an oil cutoff, there is no chance. If there is no oil cutoff going into 2018, this
chance will decrease each day that North Korea nears its supreme strategic goal of fully
developing a nuclear warheaded ICBM. If North Korea crosses this threshold, everything
about the Korean situation will change, including the policies of involved governments.
1 The author is a former (retired) Specialist in Asian Affairs with the Congressional Research Service. He
recently has taught East Asian history and security courses at George Washington University. He currently
is a Fellow with the Institute for Corean-American Studies and a Senior Associate with the Center for
Strategic and International Studies.
This page last updated September 21, 2017 jdb