South Sudanese oil production has only recently come back online as a result of security and oil agreements between Juba and Khartoum in September and March of 2012. The countries’ relationship continues to be troubled by the long history of violence between them, as well as by ongoing rebel violence and internal pressures on the regime in Khartoum. Although both countries have accused each other of supporting rebel groups active within their territories for some time, the expanding reach of the Sudan Revolutionary Front — a collection of several pre-existing rebel groups operating in Sudan — has prompted Khartoum to threaten to shut down the oil pipelines transporting South Sudanese oil.

These pipelines, which transport oil through Sudan to the Red Sea harbor city of Port Sudan, are South Sudan’s only means of exporting oil. Other plans have been considered, ranging from pipelines through Kenya to transporting oil by rail through Ethiopia and Djibouti, but none of these have materialized. South Sudan continues to be completely dependent on Sudanese infrastructure. Both countries depend on these oil exports to bring in revenue — South Sudan makes money from selling the oil, and Sudan profits from transit fees. While the oil exports represent a much bigger share of Juba’s total revenues, Sudan’s loss of most of its oil production through South Sudanese independence and its continuing struggle against inflation make the oil transport revenue a significant element of its economy.As Khartoum repeats its threat to shut down oil pipelines by Aug. 7, South Sudan has already brought its oil production down from a reported 200,000 barrels per day to 160,000 barrels per day and recently declared it will completely shut down its oil industry by July 31, ahead of Khartoum’s deadline. External stakeholders have rushed to pressure both sides to reach an agreement that would avoid a full shutdown of Sudanese oil exports. China, Russia, the United Kingdom and the United States all reportedly have begun shuttle diplomacy on the issue. China is perhaps the most important stakeholder involved, as it operates in both Sudan and South Sudan’s oil industries through the China National Petroleum Corporation and thus would be affected most by a Sudanese decision to shut down its pipelines. China has been hesitant to get directly involved, but as South Sudan dials down its output and the possibility of a shutdown becomes very real, China has committed to addressing both Khartoum and Juba in an effort to avoid this. However, in April 2012 when South Sudanese President Salva Kiir attempted to get the Chinese to intercede, Beijing balked at the prospect and ultimately did not have an effect on the previous shutdown.

A summit between Sudan and South Sudan has already been scheduled to take place in Addis Ababa before the end of July, in time to avert the stoppage, and Kiir is reported to have agreed in principle to direct negotiations with Sudanese President Omar al Bashir. However, Sudan wants guarantees that South Sudanese support for rebels within Sudan will come to a complete stop, but Juba may not be able to give such assurances, as much of this support likely comes from local populations and factions that Kiir does not directly control. Over the past six months, Kiir has removed two state governors from office, including one close to Vice President Reik Makar and the governor of oil-producing Unity state, which is directly across the border from many of the anti-Sudan rebel groups. The possibility cannot be ruled out that factions within the South Sudanese government and the regional governments are aiding the Sudanese rebels. Additionally, Makar is positioning himself as a contender to run against Kiir in the upcoming 2013 elections, and could benefit from Kiir’s image being damaged. Thus, Makar’s presidential ambitions could outweigh any interest in preventing the pipeline shutdown or halting any support for the Sudanese rebels that might be coming from South Sudan.

Separately, the African Union, which has very close relations and cooperates frequently with China, is attempting to address the original causes of the frictions between both countries. It has sent out a team of military officers that are expected to arrive in Khartoum on July 23 before beginning a weeklong fact-finding operation in South Sudan to investigate allegations that Juba supports the Sudan Revolutionary Front rebels. However, the deadline for this mission to submit its report to the African Union is still six weeks away — too late to affect Khartoum’s position before the Aug. 7 deadline.

These diplomatic efforts would continue if Sudan shut down the oil pipelines, in order to keep downtime to a minimum. However, if the shutdown lasts too long, the pipelines would have to be filled and flushed before being brought back online, and this could take several months. Thus, the interested parties will rush to prevent the stoppage in order to avoid the considerable delays that would result from a prolonged pipeline shutdown.