South Sudan’s economy is at risk. Sudan’s war threatens to halt vital oil exports, which supply over 90% of South Sudan’s government revenue. Learn more about South Sudan’s economy.
South Sudan (WE) — Sudan’s army says it may shut down facilities used to export oil from South Sudan. This move comes amid the ongoing war. South Sudan depends on oil for over 90% of its government revenue. It relies completely on Sudan to export this vital resource.
On May 9, Sudan’s army-backed government announced plans to close the facilities South Sudan uses to export oil. Experts warn this move could collapse South Sudan’s economy and pull the country deeper into Sudan’s civil war between the Sudanese Armed Forces (SAF) and the paramilitary Rapid Support Forces (RSF). The RSF launched suicide drone attacks on Port Sudan for six days straight, damaging a fuel depot and electricity grids. These attacks shattered the city’s sense of security, even though it lies far from the conflict zones.
Sudan’s army claims the damage prevents it from exporting South Sudan’s oil. Alan Boswell, a Horn of Africa expert at the International Crisis Group, described the announcement as a desperate plea to South Sudan to help stop the RSF attacks. However, he doubts South Sudan can influence the RSF. “I think this overestimates the leverage Juba has over the RSF,” Boswell told Al Jazeera.
Since South Sudan’s independence in 2011, the country has depended on Sudan to export its oil through Port Sudan. Sudan collects fees from Juba for this service, a practice established in their 2005 peace agreement that ended the north-south civil war and led to South Sudan’s secession. Despite the 2023 civil war in Sudan, Sudan’s army continued charging fees to South Sudan.
“Sudan and South Sudan remain financially tied due to the oil export infrastructure,” Boswell explained to Al Jazeera. Local media reported that officials from both countries are negotiating to avoid a shutdown. Al Jazeera asked Port Sudan’s Energy and Petroleum Minister, Mohieddein Naiem Mohamed, whether the army demands higher rent fees before resuming exports. He did not reply before publication.
The International Crisis Group also reported that South Sudan pays the RSF to avoid damage to pipelines in RSF-controlled areas. Additionally, South Sudan has allowed the RSF to operate in villages near the Sudan-South Sudan border. After forming a strategic alliance with the Sudan People’s Liberation Movement – North (SPLM-N) in February, the RSF increased its presence along this porous border. The SPLM-N, which fought against Sudan’s army alongside secessionist forces, controls parts of Sudan’s South Kordofan and Blue Nile regions and has close ties with Juba.
South Sudan’s relationship with the SPLM-N and RSF frustrates Sudan’s army. Edmund Yakani, a South Sudanese civil society leader, told Al Jazeera that Sudan’s army suspects Juba supports the RSF militarily and politically. This suspicion fuels tensions between the two neighbors.
A 2021 report from the International Crisis Group revealed that multinational companies take about 60% of South Sudan’s oil profits. The rest mostly covers outstanding loans and pays the ruling elite, security forces, and bureaucracy. President Salva Kiir may struggle to maintain his coalition without steady oil revenue. His fragile government includes loyalists and co-opted opponents, and experts fear it could collapse without the income.
Al Jazeera asked South Sudan’s Ministry of Foreign Affairs and International Cooperation about contingency plans if oil exports stop indefinitely, but received no response.
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Experts warn that South Sudan lacks alternatives to oil. Government employees already face months of unpaid salaries, which could lead them to rebel against Kiir or one another, risking the peace agreement that ended South Sudan’s civil war in 2018. Matthew Benson, a scholar at the London School of Economics, said, “Kiir stands on fragile ground, and there is no backup plan if oil revenue dries up.”
Stopping oil exports would also increase inflation, worsening the lives of millions. The World Food Programme estimates that 60% of South Sudan’s population suffers acute food shortages. Meanwhile, the World Bank reports nearly 80% of citizens live below the poverty line. Armed groups exploit this hardship by setting up checkpoints to extort civilians. With the economy already strained, citizens may have no money left to pay bribes if oil revenue ceases.
Some fear Sudan’s army aims to force South Sudan to cut ties with the RSF and SPLM-N by shutting off oil exports. This speculation is creating resentment within South Sudan, Yakani said. Meanwhile, some Sudanese army supporters argue South Sudan should lose oil revenue if it supports the RSF, which they consider a rebel militia. Both RSF and Sudan’s army have recruited South Sudanese mercenaries to fight their battles, as reported by Al Jazeera.
“The army demands Juba completely stop aiding the RSF,” Yakani said. “This puts the Kiir government in a tough spot. Many South Sudanese feel their country is becoming a proxy battleground for Sudan’s warring factions and their regional allies.”
Sudan’s army suspects South Sudan relies increasingly on RSF backers to bolster its security. The army reacted strongly when Uganda deployed troops to support Kiir in March, viewing Uganda as an RSF ally. Boswell also noted repeated Sudanese army accusations that the United Arab Emirates (UAE) arms the RSF. The UAE has denied these claims, which the United Nations and Amnesty International have also reported.
The UAE Ministry of Foreign Affairs said, “The UAE supports no parties in Sudan’s conflict.” However, analysts believe South Sudan may seek a large loan from the UAE to stabilize its government. This would happen if Sudan’s army does not resume oil exports soon.
Boswell said, “The Sudanese army watches closely whether the UAE will loan South Sudan a large sum. Such a loan could be a red line for Sudan’s army.”
South Sudan’s economy now depends heavily on Sudan’s conflict and their fragile relationship. If Sudan cuts oil exports, South Sudan faces severe economic collapse, social unrest, and deeper involvement in Sudan’s civil war.
