Military tensions in Sudan, particularly the RSF’s control of oil export infrastructure, are severely impacting South Sudan’s economy, which is highly reliant on oil revenues. The ongoing blockage of oil flows has resulted in estimated losses of $100 million monthly, adversely affecting both nations’ economies. Sudan is exploring alternative export routes, while internal rivalries threaten the stability needed for a recovery.
South Sudan’s economy is facing substantial challenges as military tensions in Sudan hinder the resumption of its crucial oil exports. With the Rapid Support Forces (RSF), a paramilitary group led by Mohamed Hamdane Daglo, also known as Hemedti, controlling key infrastructures necessary for oil exportation, South Sudan has been unable to restore its oil flow. This stagnation, which has persisted for over a year, is causing significant economic losses for South Sudan, a nation where approximately 90% of government revenues are derived from oil. The economic impact is stark, with the country reportedly losing around $100 million monthly due to the halted exports. As South Sudan relies heavily on oil revenue, the consequences extend beyond its borders, adversely affecting Sudan, which gains transit rights for South Sudanese oil. The RSF’s dominance over crucial oil pumping stations presents a formidable barrier to the resumption of these exports. Hemedti’s strategic control amplifies his influence over internal negotiations in Sudan, complicating the efforts toward achieving a viable resolution to restore oil flows in the region. This impasse harbors severe repercussions for South Sudan’s economy. The African Development Bank (AfDB) warns that without a return to oil exports, South Sudan’s current account deficit will remain at 7% of GDP for the years 2023/2024, limiting the nation’s capacity to finance essential public infrastructures and services. A potential recovery of oil flows could decrease this deficit to 4% by 2024/2025, although this remains contingent on the progress of negotiations in Sudan. Furthermore, the interruption in oil exports has repercussions on international oil markets, as South Sudanese oil is a significant contributor to regional exports, escalating pressures on the country’s economic balance. In response to its own economic challenges, Sudan is exploring alternative logistical routes for its oil exports. A proposed pipeline extending from Sudan to Djibouti, through Ethiopia, is under consideration. While Djibouti has expressed willingness to support this initiative, the realization of such a project could take several years, consequently delaying any immediate beneficial effects. However, if implemented successfully, this pipeline could diversify Sudan’s export routes and mitigate its reliance on infrastructure shared with South Sudan. The ongoing struggle for power between Hemedti and Sudanese President Abdel Fattah al-Burhan directly influences economic relations between Sudan and South Sudan. Until these political rivalries are effectively addressed, the prospects for a revival in oil exports will remain uncertain. This situation underscores South Sudan’s reliance on stability within Sudan, complicating attempts by international investors and economic partners to re-engage with the oil sector. Without a harmonious agreement among Sudanese factions, economic prospects for both nations are likely to remain constrained in the near term.
The ongoing military struggles in Sudan have created an unstable environment that significantly impacts South Sudan’s economy, which is highly dependent on oil exports. The RSF’s positional control over infrastructure critical to oil exportation exacerbates economic conditions in South Sudan and complicates political relations within Sudan itself. This interdependence is crucial for understanding the broader implications of military tensions in the region, particularly regarding economic stability and international investments.
In summary, the military tensions in Sudan, primarily characterized by the RSF’s control over essential oil infrastructure, have adversely affected South Sudan’s ability to export oil, leading to substantial economic losses and heightened instability. Both countries face dire economic consequences tied to the resolution—or lack thereof—of internal political rivalries. A return to stable oil exports remains contingent upon successful negotiations and a resolution of the ongoing power struggle between Hemedti and al-Burhan, underscoring the fragile economic landscape of the region.
Original Source: energynews.pro
