The finance minister of South Sudan and the president's office have announced significant progress in restarting the pumping of oil through a pipeline to a port in Sudan, according to Multibagger.
Importance of the Situation:
Oil exports are a crucial source of revenue for both South Sudan and Sudan, with Sudan receiving a cut of the oil as a transit fee.
In March, the main pipeline carrying oil from South Sudan through Sudan for export had faced stoppages due to issues related to conflicts between Sudan's army and the Rapid Support Forces.
Key Quotes:
"Sudanese engineers have completed the necessary technical preparations for resuming oil production," stated South Sudan President Salva Kiir's office after a meeting with Sudan's army chief.
South Sudan's Finance Minister mentioned, "There has been a breakthrough, and it will be made public very soon."
Context:
South Sudan's economy has been struggling in recent years due to communal violence and a decline in crude oil export revenue following a civil war from 2013-2018 and export disruptions due to conflicts in Sudan.
By the Numbers:
South Sudan used to export around 150,000 barrels per day of crude oil through Sudan for export, with peak production before the civil war reaching 350,000 to 400,000 barrels per day.
Analysis:
This development is significant for both South Sudan and Sudan as it could potentially boost their economies by increasing revenue from oil exports. Investors should keep an eye on how this progress unfolds, as it could impact the financial stability and growth prospects of the two nations. Additionally, global oil markets may also be influenced by the resumption of oil production in the region.