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Ghost ships at reawakened North Korea port put Kyiv in peril; Turkey sets stage for vote on Sweden’s Nato bid

Ghost ships at reawakened North Korea port put Kyiv in peril; Turkey sets stage for vote on Sweden’s Nato bid
Bloomberg
By Bloomberg
27 Dec 2023
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A dormant North Korean port near the border with Russia has sprung back to life, fuelling what experts say is a burgeoning trade in arms destined for the front lines in Ukraine that is simultaneously bolstering the anaemic economy managed by Kim Jong-un.

Turkey moved closer to approving Sweden’s long-awaited accession to Nato with a key parliamentary committee backing the bid, paving the way for a vote by the full assembly in Ankara.

Russia expects Brent prices to average between $80 and $85 a barrel next year amid Opec+ output cuts, Deputy Prime Minister Alexander Novak said in a TV interview.

Ships at reawakened North Korea port put Ukraine in peril


A dormant North Korean port near the border with Russia has sprung back to life, fuelling what experts say is a burgeoning trade in arms destined for the frontlines in Ukraine that is simultaneously bolstering the anaemic economy managed by Kim Jong-un.

Satellite imagery of the Najin port taken from October to December shows a steady stream of ships at the facility, hundreds of shipping containers being loaded and unloaded, and rail cars ready to transport goods. 

The activity appears to have picked up since early October, when the US accused North Korea of sending munitions to Russia. The White House provided imagery it said showed weapons later being delivered thousands of kilometres away to a depot in the Russian town of Tikhoretsk for use in Ukraine.

The flow of munitions that the US and South Korea say have included hundreds of thousands of artillery shells could grow far greater in importance as divisions in the US Congress and European Union over military aid threaten Kyiv’s ability to repel Russian President Vladimir Putin’s invasion.

“Pyongyang’s decision to deliver munitions at scale once again underscores the grave threat that North Korea poses to international security, this time feeding a conflagration on European soil that has already cost the lives of tens of thousands of Ukrainians and consumed tens of billions of dollars in Western military support,” according to a report by the Royal United Services Institute, a UK security think-tank.

Pyongyang, which has been banned from arms sales for about 15 years, has repeatedly rejected accusations it is supplying Russia. 

Analysis of the satellite data suggests otherwise. In a recent example, an image from 9 December seems to show the Russian container ship Angara, sanctioned by the US, in Najin’s port unloading cargo while containers from North Korea await loading at an adjacent pier.  

“Satellite imagery shows that round trips of cargo vessels between Najin, North Korea, and Dunay, Russia, have continued unabatedly despite additional US sanctions and widespread reporting on this activity in the past few months,” said Jaewoo Shin, an analyst at the Open Nuclear Network in Vienna. 

Shin said that while the nature of the cargo could not be confirmed with available imagery, the number of round trips and transferred containers suggest a significant and ongoing exchange, possibly including weapons and other military supplies. 

While satellite imagery shows steady activity at Najin, the vessels docking there appear to have turned off international maritime transponders that give their location, effectively turning them into ghost ships as they make the relatively short trip between Najin and Dunay — also written as Dunai — about 180km away. The Central Intelligence Agency identified the port as a Soviet submarine base during the Cold War, according to a document obtained by RUSI, the UK think-tank. 

South Korea’s National Intelligence Service told legislators in November there had been about 10 shipments of weapons from North Korea to Russia since August, probably encompassing more than one million rounds of artillery. North Korea holds some of the world’s largest stores of munitions, much of it interoperable with weapons Russia has on the front lines.

“About six weeks later, I’ve seen no signs of the transfer rate slowing down — so for all we know that’s another half million shells,” said weapons expert Joost Oliemans, who co-authored the book The Armed Forces of North Korea.  

“How much exactly North Korea will be able to deliver is anyone’s guess,” Oliemans said, adding that deliveries would probably slow down once inventories become depleted, with North Korea’s manufacturing capabilities insufficient to keep up with the pace of demand. 

Russia’s importance to North Korea had waned after the end of the Cold War, with China becoming Pyongyang’s biggest benefactor. Trade between Russia and North Korea slowed to a trickle when Kim shut the borders at the start of the pandemic. 

But as Covid protections eased, and international sanctions hung over Moscow and Pyongyang, the two rekindled ties, finding they each had something the other wanted and could trade without real repercussions from the outside world.

Kim heralded “the glorious course of development” his country has been taking over the past year as his ruling party opened a policy-setting meeting, the official Korean Central News Agency reported on Wednesday. 

The assistance Kim receives from Russia is easing the pressure of years of sanctions over his increasing nuclear arsenal and potentially making the already-tense situation on the Korean Peninsula worse. 

Turkey sets stage for final vote on approving Sweden’s Nato bid


Turkey moved closer to approving Sweden’s long-awaited accession to Nato with a key parliamentary committee backing the bid, paving the way for a vote by the full assembly in Ankara.

Turkey’s Foreign Affairs Committee endorsed Sweden’s entry to the military alliance, clearing one of the final hurdles for Stockholm. The parliament is widely expected to follow suit when it votes, with President Recep Tayyip Erdoğan signalling he’s in favour and his ruling AK party and its allies having a comfortable majority in the chamber.

Sweden would help bolster the North Atlantic Treaty Organization and strengthen Europe’s defences following Russia’s invasion of Ukraine in early 2022. US President Joe Biden and European leaders have pushed Erdogan to approve the country’s inclusion. Turkey is the last hold-out in the bloc along with Hungary. 

An unnamed US State Department spokesperson told Turkish state-run Anadolu Agency that they welcomed the committee’s decision and looked forward to “swift passage by the full parliament”.  

Russia expects Brent price to average $80-$85 a barrel next year


Russia expects Brent prices to average between $80 and $85 a barrel next year amid Opec+ output cuts, Deputy Prime Minister Alexander Novak said in a TV interview.

The outlook is based on several analysts’ estimates and shaped forecasts for the nation’s social and economic development, Novak said on the state-run Rossiya 24 channel.

Opec+ nations were not working to target a certain level for oil prices, Novak said.

“Our task is to balance supply and demand so that the industry works stably,” he said.

The Organization of the Petroleum Exporting Countries and its allies, particularly de facto leaders Saudi Arabia and Russia, agreed to reduce group production by 2.2 million barrels a day in the first quarter following a slump in crude prices. That includes Russia’s pledge to deepen its export reductions of crude and products to 500,000 barrels from the previous 300,000 barrels.

“Russia is a responsible participant of the agreement” to cut output, Novak said. “Our companies fulfil their obligations.” 

Russia’s Novatek starts Arctic LNG 2 project amid US sanctions


Russia’s biggest liquefied natural gas (LNG) producer began production at its Arctic LNG 2 project — despite US sanctions — in a move that could provide some relief to the tight global market for the fuel. 

The first train of the Novatek-led Arctic LNG 2 project “has actually started operating,” Russia’s Deputy Prime Minister Alexander Novak said in an interview with state-run Rossiya 24 TV channel on Wednesday. “We’re expecting the first shipments from this project in the first quarter of next year.”

The facility, located on the Gydan Peninsula above the Arctic Circle, is Novatek’s second large-scale project and is crucial for Russia’s goal to more than triple its LNG production to 100 million tonnes by the end of the decade. 

US sanctions imposed on the project’s operator in November put that ambitious goal at risk. Novatek sent force majeure notices to some LNG buyers earlier this month. Foreign partners of the project declared force majeure on their participation in the venture as well, Kommersant newspaper reported earlier this week, citing unidentified people in the Russian government. 

Novatek holds a 60% stake in the operator of the Arctic facility. TotalEnergies, China’s CNPC and Cnooc, and a consortium of Japanese trading house Mitsui & Co and Jogmec each hold a 10% stake. 

Exports from Arctic LNG 2 could add to the total pool of supply as the world — and Europe in particular — becomes increasingly dependent on the superchilled fuel to meet its energy needs. Europe still imports significant amounts of Russian LNG, even though pipeline flows have largely ceased. DM

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