Could Oil Be the Solution to North Korea Tensions?

Even before North Korea detonated its most powerful nuclear bomb yet, Japan was calling for moves to cut off its oil supply.Afterward, U.S. President Donald Trump threatened to halt all trade with any country that does business with Kim Jong Un’s regime. China, which supplies most of its food and fuel, on Monday called the warning “unacceptable.”Some sort of oil embargo is likely to come up as the international community discusses a response to the nuclear test, starting with a United Nations Security Council meeting later Monday. China has resisted such a move in the past over fears that North Korea might collapse, but has grown increasingly frustrated with its rogue ally.Still, while China might make a gesture to Trump in an effort to defuse his criticisms, it may not be the panacea the U.S. president is looking for, and do little in a practical sense to slow Kim down.

Source: China’s Oil Lifeline to North Korea Targeted After Nuclear Blast – Bloomberg

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.