Military Tensions Impede Oil Exports in South Sudan

South Sudan’s oil exports are severely hindered by military tensions in Sudan, primarily due to the control exerted by the Rapid Support Forces over essential infrastructure. This situation causes significant economic losses for South Sudan, which relies on oil for 90% of its revenue, while also impacting Sudan through the loss of transit fees. The ongoing internal rivalries complicate negotiations for resuming oil flows, and alternative logistics are only in preliminary stages, with both countries facing substantial economic instability as a result.

South Sudan is facing significant challenges in its oil export activities due to the ongoing military tensions in Sudan. The Rapid Support Forces (RSF), a paramilitary group led by Mohamed Hamdane Daglo, also known as Hemedti, currently control vital infrastructure necessary for the transportation of South Sudanese crude oil. This control has effectively halted oil exports, which have not resumed for over a year, severely impacting the South Sudanese economy, where approximately 90% of government revenue is derived from the oil sector. The country is reportedly losing about $100 million each month due to this suspension, which also adversely affects Sudan’s economy that relies on transit fees for oil passing through its territory. The RSF’s hold over the oil pumping stations serves as a formidable barrier to the resumption of oil exports from South Sudan. Hemedti’s position allows him to leverage this control against Sudanese President Abdel Fattah al-Burhan, complicating internal political negotiations in Sudan and delaying any potential resolution to the impasse. This rivalry is not only a struggle for power but also poses a significant threat to the South Sudanese economy. The prolonged halt in oil exports has resulted in dire consequences for South Sudan’s economic stability. According to the African Development Bank (AfDB), without a renewal of oil exports, the country is likely to face a current account deficit of 7% of GDP in the coming fiscal year, hindering investments in infrastructure and public services. A resumption of oil exports could potentially reduce the deficit to 4% by the following year, contingent upon successful negotiations in Sudan. Furthermore, the obstruction of oil flows adversely affects oil prices in the international market, as South Sudanese oil is integral to the regional export landscape. To mitigate their economic losses, Sudanese authorities are evaluating alternative logistical solutions, such as a proposed pipeline connecting Sudan to Djibouti via Ethiopia. Although Djibouti has shown support for this project, its implementation may take years, thereby prolonging the economic ramifications for both nations in the immediate future. Such a pipeline would diversify energy export routes and lessen reliance on shared oil infrastructure with South Sudan, which is critical as Sudan copes with its own political turmoil. Internal discord between Hemedti and al-Burhan has direct implications for the economic ties between Sudan and South Sudan. The resolution of these internal conflicts is essential for the revival of oil exports and, thus, the economic health of both nations. Until a stable political agreement is reached among the competing factions in Sudan, international investors and economic partners may remain hesitant to resume investments in the oil sector, limiting prospects for economic recovery.

The military tensions in Sudan have created a complex geopolitical scenario that significantly impacts South Sudan’s oil sector. South Sudan relies heavily on oil exports, which represent the backbone of its economy, contributing 90% of its revenue. The RSF’s control over critical oil infrastructure has rendered oil exports impossible, exacerbating the economic difficulties faced by South Sudan and affecting Sudan as well, which benefits financially from transit fees associated with South Sudanese oil. The ongoing rivalry between RSF leader Hemedti and President al-Burhan intensifies the situation, creating an environment of uncertainty for international relations and economic stability in the region.

In conclusion, the military strife in Sudan poses a substantial obstacle to South Sudan’s oil exports, with the Rapid Support Forces controlling vital infrastructure and leveraging their position against Sudanese leadership. The resultant economic impacts are significant, with immense monthly losses and potential long-term repercussions for both nations. Until internal political conflicts are resolved, economic recovery remains precarious, underlining the intertwined fates of Sudan and South Sudan and the need for stable governance to facilitate the resumption of crucial oil exports.

Original Source: energynews.pro