South Sudan’s oil export operations are severely disrupted by military tensions in Sudan, particularly due to the control exerted by the Rapid Support Forces (RSF). This standoff has resulted in substantial economic losses for South Sudan and continues to strain relations with Sudan, which relies on transit fees from these exports. The ongoing rivalry between Hemedti and President al-Burhan complicates the negotiations necessary for the restoration of oil flows, hindered further by Sudan’s exploration of alternative export routes.
South Sudan’s oil exportation remains paralyzed due to escalating military tensions in Sudan, significantly threatening the economy of the already struggling nation. The Rapid Support Forces (RSF), a paramilitary group led by Mohamed Hamdane Daglo, commonly referred to as Hemedti, exert control over critical infrastructure pivotal for South Sudan’s crude oil exports. This situation has resulted in a blockade that has lasted over a year, leading to economic losses estimated at $100 million per month for South Sudan, which derives approximately 90% of its revenue from oil exports. The disruption is not only impacting South Sudan but also bringing significant challenges to Sudan, which relies on transit fees from South Sudanese oil meant for international markets. Hemedti’s leverage over oil pumping stations not only hampers the immediate resumption of oil flows but also enhances his bargaining position in ongoing political negotiations with Sudanese President Abdel Fattah al-Burhan. This rivalry is exacerbated by the strategic significance of maintaining control over oil infrastructure, which profoundly complicates potential resolutions. Economically, the prolonged blockade is projected to sustain South Sudan’s current account deficit at around 7% of its GDP for the upcoming years unless oil exports can be restored. The African Development Bank (AfDB) has indicated that while a recovery could alleviate the deficit to 4% in subsequent years, it is highly contingent upon improved political negotiations in Sudan. The global oil market is also experiencing pressure due to the halted exports from South Sudan, which play a crucial role within the regional oil supply chain, further complicating economic stability in the nation. In response to the blockade, Sudan is exploring alternative export routes, such as a proposed pipeline connecting Sudan to Djibouti via Ethiopia. Although Djibouti has expressed preliminary support for this venture, the project’s realization would take several years, delaying any immediate benefits for the Sudanese economy and complicating its relationship with South Sudan. The current rivalry between Hemedti and al-Burhan directly influences the economic relations between the two Sudans. Until these political disputes are resolved, the future of oil exports remains tenuous, complicating efforts for international investment in South Sudan’s oil sector. Therefore, without a stable political resolution, both nations face ongoing economic difficulties in the near future.
The ongoing military tensions in Sudan have significant implications for South Sudan, particularly in the area of oil exports, which are vital to its economy. South Sudan’s economy heavily relies on oil, contributing 90% of its government revenue. Control over critical oil infrastructure by the Rapid Support Forces (RSF) led by Hemedti has resulted in a blockade of oil exports, resulting in substantial economic losses not only for South Sudan but also affecting Sudan’s economic stability, particularly concerning transit fees. The rivalry between Hemedti and President al-Burhan is further complicating the resolution of this crisis, creating uncertainty for foreign investments and economic recovery in both countries.
To summarize, the military tensions in Sudan have created a dire situation for South Sudan’s economy through the blockage of oil exports, resulting in significant financial losses and a persistent current account deficit. The political rivalry between Hemedti and al-Burhan continues to exacerbate this crisis, making the path to economic stability and recovery highly challenging. Efforts to establish alternative export routes indicate a shift in strategy for Sudan but underline the urgency of resolving internal disputes for both nations to regain economic footing.
Original Source: energynews.pro
