Tuesday, January 17, 2012

South Sudan accuses Sudan of stealing 120,000 barrels of oil a day; talks open in Ethiopia

http://www.washingtonpost.com/world/middle-east/south-sudan-accuses-sudan-of-stealing-120000-barrels-of-oil-a-day-talks-open-in-ethiopia/2012/01/17/gIQA4nAE5P_story.html

I found this article by the Washington Post interesting, because it highlights what happens when trade deals are impacted by drastic domestic political developments.  A previous negotiation has to be renegotiated because of a new regime in the South, one now able to negotiate from a position of strength (since independence).  I think that it is particularly interesting that the North assumed that domestic arrangements would continue as before, even though the South had founded a whole new country with its own national sovereignty, therefore making the exportation of oil (as well as its theft) an international issue.  Previously the theft of Southern oil would have been commonplace and handled domestically, but now it is an issue which the international community may choose sides over.  The truth is, Sudan fears that South Sudan will seek alternative trade negotiations with Kenya to export its oil to the south, circumventing Sudanese oil refineries on the Red Sea entirely, thus shattering the North's economy overnight.  In the meantime, however, I would guess we will see further "aggression" by the north to try to get as much oil as possible before any such negotiating with Kenya take place.  Regardless of current state of affairs, with South Sudan too busy building the new country and without any ready alternative, exporting oil to the north as before independence will remain for the time being.

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