Oil at risk amid fears of civil war in South Sudan

South Sudan's vice president, Riek Machar, has been detained along with his wife, effectively collapsing a 2018 peace deal that ended a five-year civil war in East Africa's biggest oil producer, his allies said March 27.

In a press conference, Oyet Nathaniel Pierino, the deputy leader of Machar's SPLA-IO rebel group turned political outfit, said there was a "high chance of full-scale war" breaking out in South Sudan, while urging the public to remain calm amid diplomatic efforts to de-escalate.

Machar and his wife Angelina Teny, who serves as the country's interior minister, are being held under house arrest in Juba. It follows the detention of key Machar allies, including military officials and Oil Minister Puot Kang Chol, as well as significant fighting in the north of the country in recent weeks between armed groups and government forces.

"The arrest of Machar is a violation since he has immunity and due process has not been followed which undermines the rule of law in this country and threatens the stability of the country," Pal Mai Deng, a spokesman for Machar's camp, said in a telephone interview, adding that the vice president's life is at risk.

Deng said the country's defense minister and security chief were among those who made the arrest late on March 26 and that the charges were not clear.

A return to civil war -- which raged for five years from 2013 to 2018, following independence from Sudan -- could disrupt the country's oil production and exports, just as they rebound from a year-long closure of its sole pipeline, which traverses war-torn neighboring Sudan.

The first cargo following the resumption shipped at the end of February, according to data from S&P Global Commodities at Sea.

South Sudan's Upper Nile State has significant producing oil fields, notably in Blocks 3 and 7, located in Melut and Maban counties, where the fighting is taking place. However, no interruptions to oil output have yet been reported.

The country saw its crude output fall by two-thirds to around 50,000 b/d throughout 2024 due to the pipeline shutdown, according to the Platts OPEC+ Survey from S&P Global Commodity Insights, with the fighting in Sudan slowing efforts to repair the ruptured pipe.

Tensions have been increasing between South Sudan's longtime president, Salva Kiir, and Machar's parties, and escalated in February when the White Army, an armed group understood to be loyal to the vice president, overran an army base in Upper Nile state and attacked a UN helicopter.

According to Michael Makuei Lueth, South Sudan's information minister, the detention of senior SPLA-IO military figures is due to lawbreaking on the part of key individuals.

"Some individuals have conflicted with the law and I believe that is the reason for their detention," he said.

The UN Mission in South Sudan has called on all parties to exercise restraint and uphold the country's 2018 peace deal, which saw Kiir and Machar co-govern.

Uganda has already sent troops to South Sudan to help boost security in the country and prevent a spillover in the wider region, Jacob Oboth, Uganda's defense minister told the parliament in Kampala March 21.

South Sudan's heavy sweet Dar and Nile Blend crudes are sold primarily to refiners in the Gulf and Southeast Asia and ship out of the Bashayer terminal at Port Sudan.

Singapore-bound Dar Blend, whose differentials to other crudes has been hit by the added risk of shipping from conflict-plagued Sudan, was last assessed at $69, a $4/b discount to the Dated Brent benchmark.