Crude Exports From South Sudan Resumes After 10-Month Force Majeure
TLDR
- Sudan has lifted a force majeure notice on crude exports from South Sudan
- That allows oil shipments to resume through a pipeline damaged in a conflict zone
- The pipeline rupture in February halted exports, a critical source of revenue for landlocked South Sudan
Sudan has lifted a force majeure notice on crude exports from South Sudan, allowing oil shipments to resume through a pipeline damaged in a conflict zone. The pipeline rupture in February halted exports, a critical source of revenue for landlocked South Sudan, which depends on oil for more than 90% of its income.
The disruption was caused by a lack of diesel needed to thin the crude for transportation. Sudan and South Sudan have since made security arrangements, and operator Bashayer Pipeline Co. has taken steps to ensure materials and equipment flow smoothly along the pipeline.
Before the rupture, 6 million barrels were loaded monthly at Sudan’s Red Sea export terminal, a figure that plunged by two-thirds in February. China National Petroleum Corp. and India’s Oil & Natural Gas Corp. are among the operators in South Sudan, which relies on Sudan’s infrastructure to bring its oil to global markets.
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Key Takeaways
The resumption of crude exports underscores the economic reliance of South Sudan on oil and Sudan’s role as a transit nation. The February disruption highlighted vulnerabilities in the pipeline network that transports crude from South Sudan’s fields to international markets. Security and infrastructure stability remain critical concerns for both nations. South Sudan’s dependence on Sudan’s pipelines and ports ties its economic stability to its northern neighbor, where internal conflicts and logistical challenges continue to pose risks. The involvement of global players like China National Petroleum Corp. and India’s Oil & Natural Gas Corp. reflects the strategic importance of South Sudan’s oil reserves. However, recurring disruptions expose operators to production delays and market uncertainty.
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