Since gaining independence from Sudan in 2011, South Sudan’s access to oil a valuable resource that once accounted for about 350,000 barrels per day has been intricately tied to its northern neighbour.

Discussions between Sudan and South Sudan on revised transit fees have failed to reach a resolution, leaving South Sudan’s vital oil infrastructure and economy in the balance.

Local media outlet Radio Tamazuj reported on Thursday that technical sources and officials highlighted the potential consequences of Sudan’s proposed adjustments to the export fees, impacting South Sudan’s already fragile economy.

Since gaining independence from Sudan in 2011, South Sudan’s access to oil a valuable resource that once accounted for about 350,000 barrels per day has been intricately tied to its northern neighbor.

The landlocked nation must rely on Sudan’s pipeline network to export its crude oil through Port Sudan on the Red Sea, rendering it vulnerable to pricing disputes.

Following nearly a year of halted exports due to ongoing conflict in Sudan, a timid resumption of oil flows took place in early 2025, lifting the force majeure that had paralyzed operations.

Just last year, however, Sudan declared force majeure again after significant damage to the pipeline amidst military tensions, further complicating the situation.

South Sudan’s Government is exploring alternative routes to mitigate this dependence. A statement from the presidency earlier indicated ongoing discussions between South Sudan and China National Petroleum Corporation (CNPC) to build a new pipeline to Djibouti, aiming to enhance crude export capabilities.

This move, part of a broader strategy to revitalize the oil sector, highlights South Sudan’s urgency to diversify its export options.

Amid these challenges, South Sudan’s national oil company, Nile Petroleum Corporation (NilePet), recently unveiled a groundbreaking agreement with Russian energy giant Rosneft at the Saint Petersburg International Economic Forum. Expected to revolutionize the nation’s oil sector, the deal includes constructing modern pipelines and refineries within South Sudan, reducing its dependency on Sudanese infrastructure.

“We are now in the final stages, and the MoU was signed in Juba. We’re currently working on technical follow-ups to finalize the full agreement,” stated Kamal Mabok, Senior Technical Advisor for NilePet, emphasizing the urgency and importance of this collaboration.

The roadmap carved by these emerging partnerships not only positions South Sudan on a path toward sustainable economic independence but also creates a pivot in its international relationships, signaling a shift from reliance on regional players to dependence through partnerships with global energy entities.

The outcome of these fee negotiations could shape the economic landscape of the region in years to come. By Emmanuel Mandella, The City Review