North Korea’s Petroleum Industry - Facilities, Demand/Supply, Distribution and UN Sanctions

Abstract

North Korea has two crude oil refining facilities of which total capacity is known as 3.5 million ton of oil per year. Seungri chemical plant, which has a 2 million ton of oil capacity, has ceased its production since early 1990 while Bongwha chemical plant of which capacity is 1.5 million ton of oil is partially under operation. Around 0.5 million ton of crude oil is delivered to Bonghwa plant every year through a North Korea-China Friendship Pipeline. The sum of petroleum products from crude oil refining in Bongwha chemical plant and petroleum products imported officially are the total official supply of petroleum products in the country. However, as the market demand rapidly increases, the supply and demand are subsequently adjusted via diverse smuggling routes. Thus, the structure of oil industry of North Korea consists of two different structure, official supply of government and unofficial smuggling of market. United Nations Security Council resolution 2397 which limits refined oil import to 0.5 million barrel per year is considered as a critical barrier for North Korean economy.