South Sudan is considering a halt in all oil exports through Sudan amid a deepening financial crisis and a protracted dispute over a ruptured pipeline, a government official told the Sudan Tribune on Monday, July 22, 2024.

According to the news outlet, the official, who spoke on condition of anonymity, said the country is exporting less than 140,000 barrels of oil daily, far below its capacity. 

The crisis has resulted in a dramatic revenue drop due to high oil companies' operating costs, leaving the South Sudan government without enough funds to pay civil servants for the past nine months. 

“There are varying views. Some are advocating for a total shutdown of the oil because it is only benefiting the rival factions in the Sudan conflict. Others are saying let us manage with whatever little that we continue to get from the flow but clearly, what comes from the oil now is close to nothing,” a high-ranking South Sudanese official at the Ministry of Petroleum told Sudan Tribune.

“It goes into obligations and leaves nothing for paying salaries.” 

Oil exports account for more than 90% of South Sudan’s budget, and a complete shutdown could exacerbate tensions in the already fragile nation, which is suffering economic pressure. The official also cited disagreements among warring factions over oil revenue sharing as a contributing factor.

Landlocked South Sudan relies on Sudan to transport its crude oil to international markets. Therefore, any disruption in the transit country often leads to a ripple effect back home. The current economic crisis has been compounded by a pipeline rupture in the Upper Nile state, which typically carries about 60% of oil from South Sudan.

The Sudanese company operating the pipeline, Bashayer Pipeline Company (BAPCO), has also been unable to deliver diesel to a pumping station, causing the oil to congeal. The pumping station is under the control of the Rapid Support Forces (RSF), while BAPCO operates under the military.

A pipeline clog in February 2024 halted shipments of 600,000 barrels, and subsequent attempts to repair it have failed. This forced the Sudanese government to declare force majeure on the pipeline in March, citing an inability to meet contractual obligations.

Negotiations among oil companies, South Sudan, and the Sudanese warring factions have yielded no progress. Technicians say a complete replacement of the clogged pipes might be necessary. However, repairs are unlikely until the rival sides are pressured by oil sector partners.

Even if cooperation emerges, spare parts procurement and delivery could delay repairs, leading to a prolonged shutdown that could worsen South Sudan’s economic crisis and result in political instability in the country plagued by war, corruption, and flooding.