Residents in the North Korean capital are scratching their heads. Although there are reports of price increases, they’ve seen no queues at the few service stations in Pyongyang, a city of about 2 million people that has more cars than it used to but is still far from congested.
“We are not aware of any long queues at the gas stations,” one foreign resident of Pyongyang said. “At least, I haven’t noticed anything. I asked a few Koreans, and they haven’t seen anything either.”
Another said there had been no obvious change since the last sanctions resolution was passed by the U.N. Security Council. “Traffic on Friday was as heavy here as I’ve seen it. Normal on Saturday. Quieter on Sunday.” In other words, the same as every week.
In its effort to punish Kim Jong Un for his continued defiance — repeated missile launches, a huge nuclear test — the United States has been leading a push to cut off oil to the isolated state. Its efforts to impose a complete oil embargo on North Korea failed, with China and Russia threatening to use their Security Council veto powers to block such a resolution.
Instead, the new sanctions measures passed last week cap North Korea’s imports of crude oil at the level they have been over the past year and limit refined petroleum imports — including gasoline, diesel and heavy fuel oil — to 2 million barrels a year.
North Korea receives about 4.5 million barrels of refined petroleum products a year and 4 million barrels of crude. The new sanctions will cut oil exports to North Korea by about 30 percent, the United States mission to the United Nations said. Fifty-five percent of that cut would be in refined products, it said, and the sanctions limit North Korea’s ability to import substitutes.
But analysts say there is plenty of wiggle room for China to continue supplying oil to North Korea if it wants to — just as a “livelihood exception” for coal exports previously did.
While supporting the sanctions in principle, China has a patchy record on implementation, and implementation depends almost entirely on China. About 90 percent of North Korea’s trade goes through China.
Trump and Chinese President Xi Jinping spoke Monday about North Korea, and, according to a White House statement, “committed to maximizing pressure on North Korea through vigorous enforcement of United Nations Security Council resolutions.”
The sanctions are unlikely to have a significant effect on North Korea’s military or nuclear weapons and missile programs, said David von Hippel and Peter Hayes of the Nautilus Institute for Security and Sustainability.
“These military sectors will have priority access to refined fuels, including likely fuel caches of significant volume that have already been stockpiled and provide a substantial buffer against the sanctions,” they wrote in a recent note. “Primarily, these sanctions will affect the civilian population.”
North Korea was constantly looking for — and finding — ways around the sanctions, making the state more resilient to existing and future sanctions, von Hippel and Hayes wrote.
That means the new sanctions will have little effect on the desired goal — reversing North Korea’s missile and nuclear programs — and could diminish the leverage that the international community has over North Korea. For example, when it needs to persuade North Korea to come back to denuclearization talks, the analysts said.
Although there are no obvious signs of gas lines forming — no surprise in a country where there is almost no private car ownership — there has been evidence of an increase in prices.
Gasoline prices started to rise in certain parts of the country, apparently in anticipation of shortages, after North Korea’s sixth nuclear test, conducted Sept. 3.
In Pyongyang, one kilogram (2.2 pounds) of gasoline — that’s how it is measured in North Korea — rose from 18,000 to 23,000 North Korean won during the first week of September, the Daily NK website reported, citing people in the capital. Diesel prices also increased, it reported.
(In U.S equivalents, the price rise for gasoline works out to a jump from $6.28 to $8.02 a gallon, using the market exchange rate for the North Korean currency, as opposed to the unrealistic official rate.)
There have been blips like this several times this year, but analysts say they have seen no other signs of stress in the economy — such as rising rice prices or sudden exchange rate fluctuations.
There have been some limitations on filling jerrycans, but this appeared to be a measure to stop reselling and had been in place for some time, one Pyongyang resident said.
Others said it will take time to see whether there is any effect from the sanctions — and certainly longer than the week it took before Trump claimed there was an impact.