South Sudan has resumed crude oil exports after renewing a marketing and offtake agreement with trading firm BB Energy, government and industry sources said on Monday, easing a months-long disruption to shipments.
The renewed deal restores BB Energy’s role in lifting and marketing South Sudan’s Nile Blend crude, following negotiations over payment terms and operational costs linked to transit through neighbouring Sudan. Exports had slowed amid disputes and logistical bottlenecks that constrained output from the landlocked producer.
South Sudan pumps most of its oil from fields in Upper Nile and Unity states, with crude transported via pipelines through Sudan to the Red Sea. Oil accounts for more than 90% of government revenue, making uninterrupted exports critical for fiscal stability and foreign exchange earnings.
Officials said loadings are expected to normalise in coming weeks as operators ramp up production and clear backlogs at export terminals. The government did not disclose volumes or contract pricing, but said the agreement would improve cash flow and support budget execution.
BB Energy has marketed South Sudanese crude for several years, providing pre-financing and logistics support in exchange for offtake rights. The renewed arrangement comes as Juba seeks to stabilise output, attract investment and reduce vulnerability to regional disruptions.
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Market participants said the restart could add incremental barrels to global supply, though sustained exports will depend on security along transit routes and coordination with Sudanese authorities.
South Sudan’s oil sector sits at the core of its economy and public finances, but has remained structurally fragile since independence in 2011. The country holds an estimated 3.5 billion barrels of proven reserves, yet production has steadily declined from a peak of about 350,000 barrels per day before independence to well below 150,000 bpd in recent years, according to industry estimates. Chronic underinvestment, ageing infrastructure, insecurity around oilfields and repeated shutdowns have constrained output.
As a landlocked country, South Sudan depends entirely on export infrastructure located in neighbouring Sudan. Crude is transported via two main pipeline systems running north to Port Sudan on the Red Sea, exposing exports to political, security and commercial risks beyond Juba’s control. Transit fees paid to Sudan are among the highest in the world, significantly reducing net revenue for the South Sudanese state and often sparking disputes over arrears and payment schedules.
Oil provides more than 90% of government revenue and the bulk of foreign exchange earnings, making export disruptions immediately destabilising for the economy. Any interruption typically leads to salary arrears, rising inflation and pressure on the local currency, the South Sudanese pound. The government has repeatedly relied on oil-backed loans and advance sales to traders to finance spending, deepening its vulnerability to fluctuations in production and prices.
Trading firms have long played a central role in sustaining exports. BB Energy has been one of the main lifters and marketers of South Sudan’s Nile Blend crude, often providing pre-financing arrangements that allow the government to access cash upfront in exchange for future oil deliveries. While such deals help bridge short-term financing gaps, economists and transparency groups have warned they reduce fiscal flexibility and can lock the country into opaque commercial terms.
Exports have faced renewed strain over the past year due to operational bottlenecks, maintenance issues on pipelines and tensions linked to the conflict in Sudan, which erupted in April 2023 and has periodically disrupted oil transit and port operations. Although flows were never fully halted, loadings slowed sharply, exacerbating South Sudan’s fiscal stress at a time of rising humanitarian needs and limited donor support.
The resumption of exports under a renewed agreement with BB Energy therefore reflects both the urgency of restoring cash flow and the limited alternatives available to Juba in the short term. Authorities have repeatedly stated their intention to rehabilitate oilfields, attract new investment and diversify the economy away from oil dependence, but progress has been slow amid political uncertainty and weak institutions.
In the medium term, South Sudan’s oil outlook will continue to hinge on stable relations with Sudan, successful pipeline maintenance and reforms to improve transparency and governance in the sector. Without these, analysts say the country will remain exposed to recurrent export disruptions and volatile revenues, even as oil remains its economic lifeline.
