Under pressure from the U.N., Sudan and South Sudan reached a border security deal on Wednesday, which means oil exports can now resume. The deal comes after three weeks of negotiations and should check a recurrence of the kind of border violence that broke out back in April.
Both countries have minimal trust for each other and a checkered history, but facing U.N. sanctions and utter economic collapse, Sudanese President Omar Hassan al-Bashir and South Sudanese President Salva Kiir agreed to deploy a demilitarized border buffer zone.
Land-locked South Sudan can now resume oil exports through Sudan, benefiting both nations. Back in January, a dispute over transit fees caused the south to completely shut down its 350,000 barrels per day production.
However, this deal still doesn’t take care of five disputed oil-producing regions along the border. Likewise, the border region of Abyei remains unresolved. Although the deal was signed yesterday, actual resumption of southern oil production will take a few months since pipelines were loaded with water to prevent blockage, and some fields sustained damage during the conflict.
Under the terms of the deal, both armies will pull back 6 miles from the border, and a strategic strip of land called Mile-14 will be treated with special concern.
It’s important to stress that this is a patchwork deal and many issues remain cloudy. Oil prices will certainly be affected, but the lack of certainty as far as the future is concerned means we should still be careful.
