Military tensions in Sudan are severely obstructing South Sudan’s oil exports, controlled by the RSF, resulting in significant economic losses for South Sudan, amounting to $100 million monthly. This situation destabilizes not only South Sudan’s economy but also affects Sudan. Efforts to find alternative export routes are underway, but lasting solutions will depend on resolving political rivalries in Sudan.
South Sudan, an oil-dependent nation, is facing significant obstacles in reviving its oil exports due to escalating military tensions in Sudan. The Rapid Support Forces (RSF), a paramilitary group under the command of Mohamed Hamdane Daglo, commonly referred to as Hemedti, are controlling critical infrastructure necessary for the export of South Sudanese crude oil. This control has severely hindered any effective return to oil production and exportation, which has remained suspended for over a year. As a result, South Sudan’s economy is feeling the strain; the country, which derives 90% of its revenues from oil, is reportedly losing about $100 million monthly due to halted exports. These economic losses extend to Sudan as well, which gains from transit rights for oil flowing from South Sudan through its territory. Amidst an ongoing rivalry with Sudanese President Abdel Fattah al-Burhan, the RSF maintains a strategic grip on the oil infrastructure. By controlling the pumping stations, Hemedti exercises significant leverage in the internal political negotiations of Sudan, thereby complicating any swift resolutions to the crisis. The RSF’s ability to disrupt oil exports complicates Hemedti’s negotiations with al-Burhan, further delaying progress towards restoring oil flows that are crucial for economic stability in the region. The ongoing stalemate in oil exports poses dire consequences for South Sudan’s economic health. According to the African Development Bank (AfDB), without a revival in oil exports, South Sudan’s current account deficit is projected to remain at 7% of its GDP in 2023-2024, constraining resources available for infrastructure development and public services. Conversely, if oil exports resume, the deficit might decrease to 4% by 2024-2025, contingent upon negotiation progress in Sudan. Moreover, the cessation of oil flows is impacting international market price stability, as South Sudanese oil plays a vital role in regional exports. The continuation of this blockade is economically debilitating, amplifying internal tensions within South Sudan and limiting the government’s international operational flexibility. On Sudan’s front, the urgency of securing its own oil exports has led authorities to explore logistical alternatives. Plans for a pipeline connecting Sudan to Djibouti via Ethiopia are currently under consideration. Although Djibouti has shown willingness to support this project, its actualization is expected to take several years, thus delaying any immediate positive effects. If successfully implemented, this initiative could provide Sudan with diversified export routes, reducing reliance on joint infrastructure with South Sudan. Stable energy infrastructure is paramount for Sudan, particularly as it navigates ongoing political crises. The transit fees from South Sudanese oil exports significantly contribute to Khartoum’s revenue amidst financial instability and inflation challenges. The completion of the Djibouti pipeline may lend some relief in the medium term and shift the regional geopolitical dynamic. The internal rivalry between Hemedti and al-Burhan directly influences Sudan and South Sudan’s economic relations. Until these political tensions are ameliorated, the outlook for oil export recovery remains tenuous. This situation underscores South Sudan’s vulnerability, particularly in its reliance on Sudan’s stability. Additionally, the ongoing internal conflicts in Sudan are deterring international investors from re-engaging with the oil sector until a stable resolution emerges. Without a consensus among Sudanese factions, both nations’ economic prospects will likely remain constrained in the near term.
The ongoing military tensions in Sudan significantly impact South Sudan’s economy, primarily due to South Sudan’s heavy reliance on oil exports. The control of strategic oil infrastructure by the RSF, a key player in Sudan’s power dynamics, hinders oil flow and complicates the political landscape, creating a complex interplay between military control and economic repercussions.
In summary, the military tensions in Sudan pose a formidable threat to South Sudan’s vital oil export economy, causing substantial financial losses and threatening regional stability. The RSF’s control over oil infrastructure and the existing political rivalries prolong the deadlock, necessitating urgent diplomatic efforts to restore normalcy in oil exports and safeguard the economies of both nations.
Original Source: energynews.pro
