The Pipeline Politics: Why South Sudan’s Economic Future Cannot Depend On Sudan

The Republic of South Sudan possesses a resource that should be the bedrock of its prosperity: vast reserves of crude oil, estimated at 5 billion barrels of proved reserves at the beginning of 2025. Yet, this "black gold" has proven to be a Faustian bargain. 

As a landlocked state, South Sudan’s economic lifeline—the oil pipeline running north through its volatile neighbour, Sudan—transforms a domestic resource into a profound and perpetual diplomatic vulnerability. This dependency does not merely pose an economic challenge; it acts as a strategic chokehold, forcing South Sudan to walk a diplomatic tightrope that compromises its sovereignty, limits its foreign policy options, and keeps its economy on a knife-edge. The nation is caught in a classic "resource curse," where the abundance of a single commodity fosters instability and external leverage.

The fundamental issue is simply geography. South Sudan, which gained independence in 2011, inherited more than three-quarters of the former Sudan's oil reserves. However, all infrastructure for exporting this oil—the pipelines, processing facilities, and the vital marine terminal at Port Sudan on the Red Sea—remains firmly within the Sudanese territory. This logistical reality has created a symbiotic, albeit deeply imbalance, relationship.

Oil accounts for an overwhelming proportion of the South Sudanese government's revenue, consistently around 90 percent, and nearly all its exports. The entire national budget—the salaries of civil servants and soldiers, and the delicate patronage networks that maintain an uneasy domestic peace, are all financed by this single commodity stream. This economic monoculture means that any disruption to the pipeline instantly sends the country into a tailspin of fiscal distress, currency collapse, and humanitarian crisis. For instance, the year-long shutdown of the Petrodar pipeline between February 2024 and April 2025 severely undermined macro-stability, leading to a projected GDP contraction of 23.8 percent for the fiscal year 2024/2025 and inflation reaching 115 percent at the end of 2024. The government is, metaphorically and literally, putting all its eggs in one basket.

A Hostage Economy 

This infrastructure dependency grants Khartoum extraordinary and recurring leverage over South Sudan. The relationship is governed by the 2012 oil agreements, which stipulate transit fees for the use of Sudanese pipelines. Under the current arrangement, Juba pays approximately US$1.60 for processing, US$8.40 for transit via the state-owned Petco line, and US$6.50 for the Petrodar line, plus a US$1 sovereign fee and US$15 under transitional financial arrangements per barrel. These fees, however, are a constant source of contention and an instrument of political coercion.

Khartoum has historically shown no qualms about using this leverage as a diplomatic cudgel. In 2012, amidst disputes over unpaid fees, Sudan began confiscating South Sudanese oil as compensation, prompting the South Sudan government to shut down its entire production for over a year. This move was an act of economic self-immolation but highlighted the desperate measures South Sudan felt compelled to take to assert its independence. 

More recently, the ongoing civil war in Sudan, which erupted in April 2023, has brought this vulnerability into sharp relief. The conflict has not only damaged Sudanese infrastructure but has seen warring factions interfere with the logistics required for oil flow. In early 2024, the pipeline was shut down after the Rapid Support Forces (RSF) disrupted the supply of crucial chemicals needed to prevent the crude oil (specifically the corrosive Dar blend) from thickening and freezing. These physical threats to the pipeline infrastructure mean that the fate of South Sudan’s economy is now held hostage not just by the Sudanese government but also by non-state actors and regional instability.

The diplomatic ramifications are clear: South Sudan is severely constrained in its ability to condemn actions in Sudan or pursue a robust, independent foreign policy. It must constantly engage in delicate, often unequal negotiations with the warring parties in Sudan to ensure the safety and accessibility of its export infrastructure. Juba has been forced into striking agreements with both the Sudanese army and the Rapid Support Forces (RSF) to protect the pipeline, a diplomatic tightrope act that underscores its lack of independent control.

 The Peril of a Single Artery

The vulnerability extends further than just immediate political disputes; it impacts global supply chains and South Sudan's international reputation as a reliable energy supplier. When the Petrodar pipeline faced a prolonged shutdown (Feb 2024–Apr 2025), export volumes plummeted from around 186,000 barrels per day in January 2024 to just 58,000 bpd  by December. During this period, Juba was forced to seek billions of dollars in advance payments from companies like CNPC and ONGC against future crude entitlements to cover its fiscal deficit, effectively mortgaging its future oil output. This cycle of debt further places the country at the mercy of international oil traders and lending nations.

Furthermore, South Sudan's national interests often become entwined with those of major oil investors, primarily China. The People’s Republic of China, a top buyer of South Sudanese oil and a major investor in its oil fields through joint operating companies like GNPOC (in which CNPC holds 40 percent), has a vested interest in regional stability. This dynamic can create a complex web of influence where South Sudan must align its policies with its main economic patrons, potentially at the expense of other strategic relationships or internal reforms. The withdrawal of other partners like Petronas in 2024 due to the challenging environment further demonstrates this vulnerability.

The Elusive Alternative

The writing on the wall has been clear and loud for a very long time: diversification is not just an economic strategy but a national security imperative. South Sudanese leaders have long spoken of developing alternative export routes to bypass Sudan's leverage.

The most prominent alternative is the Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) Corridor project, an ambitious regional initiative designed to link South Sudan to the Kenyan port of Lamu. This project, which includes plans for highways, railways, and an oil pipeline, is envisioned as a "game-changer" for East Africa's landlocked nations.

However, these alternatives remain largely castles in the air. Progress has been slow, marred by immense capital requirements, security concerns, and the logistical complexity of building infrastructure across vast distances and challenging terrain. While Kenya aims to be an oil exporter by 2026, the South Sudan leg of the pipeline remains in the planning stages, a long way from operational reality. The immediate reality is stark: South Sudan has no operational alternative route. This means, for the foreseeable future, Juba must make a virtue of necessity and continue its uneasy cohabitation with Khartoum.

With all these setbacks in the surface, South Sudan’s heavy reliance on a single, vulnerable export pipeline through a conflict-ridden neighbour is an existential threat. It has rendered the nation a hostage to the volatile politics of the wider region, limiting its diplomatic room for manoeuvre and ensuring its economy remains chronically unstable.

The solution requires not just political will but a fundamental shift in national priorities. Juba must redouble its efforts to get the LAPSSET corridor operational. This is a long-term investment in sovereignty and economic resilience.

In addition, The Government of South Sudan must prioritize non-oil sectors, particularly agriculture, which already employs the majority of the population but remains underdeveloped. Non-oil revenue collection has shown growth, indicating potential for expansion.

Managing oil revenues transparently and reducing reliance on debt financing can also help build internal resilience against external shocks. Concerns raised by the International Monetary Fund (IMF) regarding financial governance and transparency must be addressed to unlock potential international support and build public trust.

Until these steps are taken, South Sudan will remain trapped in "pipeline politics," its promising future held captive by a single, fragile artery to the Red Sea. This current crisis is a wake-up call that the path to true independence lies in economic and logistical self-reliance. 

Currently, the relationship between South Sudan and Sudan is a classic case of resource-based codependency, yet heavily skewed. South Sudan owns the resource, but Sudan controls the exit point. Until Juba can free itself from this infrastructural and political chokehold through massive investment in alternative pipelines and, more crucially, genuine economic diversification and transparent governance, the young nation will remain held hostage. Its stability and future prospects are constantly held to ransom by the conflicts and political manoeuvres of its northern neighbour. The dream of full economic independence remains deferred, trapped within the very pipelines that were meant to secure it, a constant reminder that for South Sudan, the only way out is through Sudan.

About the author 

Amaju Ubur Yalamoi Ayani, aka Amaju Joseph Ubur Ayani, is a teacher and political commentator. He holds a Master of Arts Degree in International Relations, a BSc Degree in Political Science, and a Diploma in Civics. He can be reached via This email address is being protected from spambots. You need JavaScript enabled to view it..