Rédaction Africa Links 24 with Ateny Dut
Published on 2024-03-03 07:07:39
The principal maritime route utilized by South Sudan for oil exports to Gulf countries has been effectively blockaded, restricting the passage of ships and vessels in the Red Sea corridor. Al Jazeera reports that this closure is a direct result of the intense fighting between the Houthi militia and Yemeni military forces against the Western alliance, primarily the UK and USA.
This blockade poses significant challenges for South Sudan, whose economy is heavily dependent on oil exports. Despite producing billions of barrels of oil daily, the sealing off of this route stifles its ability to transport oil to the international market. Minister of Information, Communication, Technology, and Postal Services, Michael Makuei Lueth, highlighted in a press release the impact of Sudan’s war on South Sudan’s economy, especially its oil sector. He stated, “Due to the war, along with severe flooding and technical issues within the pipeline stations, South Sudan is struggling with its oil production and exportation.”
Moreover, concerns over insecurity in the Red Sea are causing hesitation among cargo ships carrying crude oil shipments, fearing potential blockades. This situation is particularly distressing for South Sudan, which heavily relies on oil revenue, as multiple media reports indicate. Al Jazeera reported that, in a sign of tighter supply, the market structure of Brent hit its most bullish level as tankers diverted from the Red Sea following recent air strikes by the United States and United Kingdom on targets in Yemen.
According to Xinhua Chinese news agency, South Sudan managed to export around 150,000 barrels of crude oil per day between November 2023 and January 2024. This figure underscores the pressing issues facing the country’s economy and the urgency of addressing these multifaceted challenges. South Sudan’s reliance on oil as its primary source of revenue means that the nation would face an incredible economic crisis due to the disruption in oil exports, potentially destabilizing the country’s fragile economy.
The blockade in the Red Sea corridor not only impacts South Sudan’s economy but also has far-reaching consequences on the global oil market. The closure of this vital maritime route has led to disruptions in oil supply, affecting the market price for Brent, which is crucial for pricing nearly 80 percent of the world’s traded oil. The recent air strikes in Yemen by the United States and United Kingdom have further exacerbated the situation, prompting tankers to divert from the Red Sea and causing a tightening of oil supply.
In conclusion, the blockade in the Red Sea corridor is creating significant challenges for South Sudan’s economy, particularly its oil sector. The country’s heavy reliance on oil exports makes it vulnerable to disruptions in this crucial maritime route. Addressing these challenges is vital to ensuring the stability and prosperity of South Sudan’s economy and mitigating the potential negative effects of the blockade on both the nation and the global oil market.
Read the original article on Talk of Juba
