The new restrictions will go into effect over the weekend.
On Wednesday, South Korean newspaper Chosun Ilbo reported that Chinese shipping companies were dodging the United Nations sanctions on oil sales to North Korea by registering ships in third countries. The precise volume of exports in previous years is information the Chinese government is reluctant to disclose, so it is difficult to judge just how hard the new cap of 4 million barrels per year will hit the North Korean regime.
The same news outlet reported last week that US recon satellites had photographed around 30 illegal transactions involving Chinese vessels selling oil to North Korea on the West Sea in October.
China is the North's main trading partner and energy supplier, making its enforcement measures critical to the success of sanctions. Oil restrictions have always been seen as the ultimate leverage Beijing possesses over Pyongyang, a leverage China has been reluctant to use despite frequent American requests to do so.
Last month, South Korean authorities impounded the Lighthouse Winmore, a Hong Kong-flagged tanker suspected of transferring fuel to a North Korean ship while in worldwide waters. However, the Taiwanese suspect denies knowing that the recipient would be a North Korean ship.
"The global shipping industry is highly open, and it's very common for ships to change their flag state and place of registration or to be leased to other parties", Chinese Foreign Ministry Spokesperson Geng Shuang said on Friday.
Beijing will limit exports of crude oil and refined petroleum to the North and ban sales of steel, industrial machinery and vehicles, the Commerce Ministry announced.
It also follows an agreement on Friday by North Korea to hold official talks with the South next week, the first in more than two years amid rising tensions over its nuclear and missile programmes.