Sudan Update: What If Oil Exports from Port Sudan Are Halted?
In the News:
Sudan fighting persists on Eid holiday despite 72-hour cease-fire announcement
Good Background: Meet Sudan's web of warlords, foreign backers and their tangled alignments
Commentary:
Crude exports from Sudan and South Sudan stood at around 77,000 barrels per day (b/d) in March, according to figures from data intelligence firm Kpler, with the UAE and Malaysia being the top two destinations. Oil exports from landlocked South Sudan are exported via Sudan’s Red Sea ports.
Exports to the UAE, and from where they most likely head to Asia, stood at 58,000 b/d, a rise from 35,000 b/d the previous month, while flows to Malaysia were at 10,000 b/d a drop from 21,000 b/d in February.
Other destinations include China and Italy. Exports to China were last seen in April 2022 standing at 40,000 b/d, while exports to Italy were last observed in February at 36,000 b/d, Kpler’s data shows.
EOA’s Main Takeaway:
The evacuation is an indication that the fighting is going to get worse. The possibility that oil exports from Port Sudan coming to a complete halt is high. While the amount is relatively small since exports were less than 100,000 b/d in recent months, we have to remember that this comes on top of the loss of 450,000 b/d from Northern Iraq and voluntary cuts by large producers in OPEC+. But since the cut is “voluntary,” some countries may not cut what they committed to.
The intensity of the fighting in Sudan has brought life to a standstill in many areas across the country. If clashes between Sudan’s army and paramilitary forces continue, this may lead to a halt in oil flows through a pipeline that connects key oilfields in neighboring South Sudan to the Red Sea Port of Sudan. South Sudan seceded from Sudan in 2011 and it relies on Sudan’s ports for exporting its oil.
As mentioned above, the amount of oil is small by any standards. But a halt in oil flows will most likely stir chaos in landlocked South Sudan, which heavily depends on oil exports for revenues.
As for the UAE being the main importer of crude from Sudan, the UAE is not only involved in ports in Sudan but also a main exporter of refined products to Sudan. In May 2021, The UAE committed to supplying Sudan's full requirements of petroleum products through a contract by the UAE's state oil producer ADNOC.
South Sudan has been looking at different routes for many years. The existing pipeline through Sudan is still the best option, despite the heavy tolls the Government of Sudan collects. While a halt in pumping oil should intensify the search for alternatives, it remains to be seen who is going to finance a pipeline when many countries are calling for a transition away from fossil fuels.
Sadly, we post reports and articles about oil and various energy resources and issues, but the bigger and more significant story is the human tragedy and suffering in Sudan and South Sudan.