Conflict on Oil Between Sudan and South Sudan
After decades of civil war between North and South Sudan a nation wide referendum was held in January 2011 granting the independence of South Sudan by a majority vote of nearly 99% in favor or partitioning the once united war plagued nation (NYT 2012). Unfortunately however, the division of these two states did not put an end to the fighting. South Sudan, one of the least developed countries in the world, gained nearly 70% of the formerly united nation's oil reserve (CNN 2012). Sudan, a far more developed country, on the other hand, was the only of the two nations with access to the necessary processing facilitates and pipelines needed to export the oil overseas. The failure of these two states to negotiate on a proper price for Sudan's transport of the oil has caused South Sudan to threaten to stop oil production until a reasonable agreement can be made (The National 2012). Although South Sudan's threat to halt oil production did not seem exceptionally credible because it would severely harm not only Sudan's economy but also its own economy, it was effective when enacted because neither country could survive without each others cooperation as oil was both their main sources of revenue. By the end of 2011, a bitter oil dispute arose between Sudan and South Sudan. Sudan did not feel as if they were being fairly compensated for South Sudan's use of Sudan's pipelines for over sea transport of oil. They responded by impounding oil shipments. In retaliation, South Sudan had no choice but to halt oil production or face constant impounding of their oil by Sudan (NYT 2012). South Sudan's threat to halt oil production, which once lacked credibility, now became necessary. South Sudan believed that halting oil production, a risk in itself that could potentially cause the collapse of its own state, would be better and more efficient than giving into Sudan's demand of $36 per barrel of oil shipped through Sudan's pipelines...
Please join StudyMode to read the full document