Running on Pixie Dust

Let’s hope Kim Jong-Il has plenty of that

BEIJING China cut off oil exports to North Korea in September, amid heightened tensions over that country’s nuclear and missile programs, Chinese trade statistics show.

The unusual move – the figures show China sold no crude oil at all to its neighbor in September – reduced cumulative sales for the year by about 7 percent over the same period in 2005. China’s oil exports to Pyongyang had been averaging about 50,000 metric tons a month this year.

In September, China exported 125,185 tons of crude for a reported value of $62 million. All of that was exported to the United States, with North Korea receiving nothing.

North Korea depends on China for up to 90 percent of its oil, much of which is sold on credit or for bartered goods, according to Chinese energy experts. Any sustained reduction could cripple its isolated and struggling economy.

Unfortunately, since crude oil is a global commodity, there are plenty of suppliers that are willing to meet North Korea’s demand (Iran and Venezuala come into mind). In the long run, baring a naval blockade, there will be little effect on the regime.