Military Tensions Impede Oil Exports in South Sudan

South Sudan faces crippling economic losses as military tensions in Sudan obstruct oil exports, controlled by the RSF. Nearly 90% of South Sudan’s revenue originates from oil, leading to losses of approximately $100 million monthly due to halted exports. The RSF’s influence complicates political negotiations with Sudan’s government, impacting regional economic stability. Alternative oil export strategies, like a new pipeline to Djibouti, are being considered, but immediate benefits may be delayed.

South Sudan, whose economy predominantly relies on oil exports, is currently facing severe disruptions in its oil production due to the ongoing military unrest in Sudan. The situation has been exacerbated by the Rapid Support Forces (RSF), a paramilitary group under the leadership of Mohamed Hamdane Daglo, colloquially known as Hemedti. The RSF’s control over crucial oil export infrastructure has entirely obstructed any potential resumption of oil flows, which have remained halted for over a year. This blockade is inflicting substantial economic damage on South Sudan, which generates 90% of its income from the oil industry, resulting in an estimated loss of $100 million per month since the cessation of exports. The economic ramifications extend beyond South Sudan, impacting Sudan as well, which profits from transit rights over South Sudanese oil traversing its territory. Amidst its ongoing rivalry with Sudanese President Abdel Fattah al-Burhan, the RSF leverages its control of oil infrastructure to exert influence in internal political negotiations. This rivalry complicates the prospects for a swift resolution of the conflict, as Hemedti utilizes the RSF’s strategic position to negotiate terms with al-Burhan, consequently stalling progress toward the restoration of oil exports vital for the region’s economic stability. The continued blockade poses dire consequences for South Sudan’s economy, with the African Development Bank (AfDB) predicting that the current account deficit may hold steady at 7% of GDP in 2023-2024 without a revival in oil exports. A potential recovery could lower this deficit to 4% in 2024-2025, contingent on the successful facilitation of negotiations in Sudan. Furthermore, the interruption of oil deliveries threatens price stability in international markets, given the significance of South Sudanese oil in regional exports. In response to its economic needs, Sudan is exploring alternative routes for oil exports, including a proposed pipeline that would link Sudan to Djibouti through Ethiopia. Although Djibouti has voiced support for this initiative, it is anticipated that the project’s realization will take considerable time, delaying immediate benefits. Should this pipeline be completed, it would extend Sudan’s export capabilities while mitigating its dependence on shared infrastructure with South Sudan. This project is critical for Sudan, which requires stable energy logistics amidst ongoing political instability and inflation. The internal rivalry between Hemedti and al-Burhan perpetuates instability, significantly hindering economic relations between Sudan and South Sudan. The prospects for resuming oil exports remain precarious until these political tensions are alleviated. This environment magnifies the hurdles facing Juba and brings to light South Sudan’s reliance on stability within Sudan. Furthermore, investors and economic partners are hesitant to engage without a cohesive resolution among Sudanese factions, thereby constraining the economic potential for both nations in the near term.

The military crisis in Sudan has significant implications for South Sudan, which is heavily reliant on oil exports as a cornerstone of its economy. The RSF, having gained control over key oil export infrastructures, poses a major obstacle to the revival of oil flows, which are vital for South Sudan. The political struggles between the RSF and Sudan’s government complicate negotiations necessary for restoring oil exports. South Sudan’s economy, struggling due to a heavy reliance on oil revenues, is directly affected by the military developments in neighboring Sudan.

In conclusion, the ongoing military tensions stemming from the rivalry between Hemedti and al-Burhan continue to hinder any potential recovery of oil exports from South Sudan. The blockages imposed by the RSF not only threaten South Sudan’s economic stability but also have broader implications for Sudan’s transit revenue. As both nations navigate their political crises, the future of their economic relations, heavily intertwined, remains uncertain without a resolution to the existing conflict.

Original Source: energynews.pro