Sudan oil tensions escalate, one shipment halted

North Sudan has halted an oil shipment from landlocked South Sudan in a dispute over customs fees, it said on Friday, signaling a rise in tensions that could disrupt supplies from one of Africa’s largest producers.

South Sudan became independent last month after a referendum in January agreed under a 2005 peace deal that ended decades of civil war with the North.

The South took 75 percent of the country’s 500,000 barrels a day of oil production, Africa’s fifth largest, but depends on the North to use the only cross-border pipeline to the Red Sea port of Port Sudan to sell the oil.

On Friday customs authorities in Port Sudan stopped one shipment because duties had not been paid, a spokesman for the foreign ministry in Khartoum said without giving other details.

“Customs asked for the fees to be paid. They paid last time but not this time,” the spokesman said

He said the action had been the decision of the customs authorities and was not related to current talks between North and South about sharing oil revenues.

The two sides have failed so far to reach an agreement on a transit fee to be paid by the South. Until now both split equally the oil, the lifeline of both economies.

Tensions seemed to have eased at the end of last month when South Sudan said it saw progress in oil sharing talks with the North only a week after accusing it of waging economic war by demanding a very high pipeline transit fee.

Refineries also only exist in the North and experts say southern plans to connect to a pipeline in east African neighbor Kenya are years away.

Analysts say there has been little transparency for years about how oil revenues are booked in Sudan, which has endured conflict, inflation, corruption and US trade sanctions.

Apart from sharing oil revenues, both sides need to end violence in some parts of their shared border and they need to divide up other assets and debt.

Some 2 million people died in Sudan in a decades-long conflict over religion, ethnicity, ideology and oil, although the secession last month was very peaceful.

Sudanese oil flows mainly to Asia, with China buying more than a half of total volumes. South Sudan’s production is dominated by Chinese and Indian companies, which have been marketing their crude themselves so far.

Last month, South Sudan also signed a deal with trading house Glencore to help it market crude but a dispute between various officials has threatened to derail the agreement.