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Force majeure declared on South Sudan's Dar Blend crude loadings: sources

Highlights

Pipeline rupture in conflict-plagued neighboring Sudan prompts suspension

South Sudan exports at 11-month low amid Sudan war, Red Sea disruption

Country's Dar, Nile crudes exported from port Sudan via Khartoum pipeline

  • Author
  • Charlie Mitchell    Mei huey Ng
  • Editor
  • Dan Lalor
  • Commodity
  • Crude Oil Shipping Upstream

A major South Sudanese producing consortium has declared force majeure on loadings of the country's key Dar Blend crude after a rupture on the export pipeline through war-torn neighboring Sudan, sources said.

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According to documents seen by S&P Global Commodity Insights, an incident on the pipeline via Khartoum in early February prompted the Dar Petroleum Oil Company (DPOC) to suspend February and March loadings on Feb. 12.

At least one cargo, comprising 600,000 barrels of oil, had been due to load Feb. 22-23, according to the documents, but that lifting was canceled.

It came as crude exports from Sudan's Bashayer oil terminal in the Red Sea slumped to an 11-month low 79,000 b/d in February, according to tanker-tracking data from S&P Global Commodities at Sea, with officials blaming Red Sea disruptions and the Sudan war.

Oil exports from the terminal -- which include Nile and Dar Blend crude from both South Sudan and Sudan -- averaged 136,000 b/d in 2023, most of it destined for refiners in Malaysia, Singapore, China and Italy.

The data showed the last loadings from Bashayer occurred on Feb. 15, with the LESVOS transporting a Vitol cargo of sweet oil to Fujairah port in the UAE, and Feb. 16 with the Singapore-bound MONVOS products tanker.

Representatives of South Sudan's oil ministry and Vitol did not respond to requests for comment. State-owned Nilepet and DPOC could not be reached.

DPOC is a consortium that includes Nilepet, China's CNPC and Sinopec and Malaysia's Petronas.

It was not clear if the force majeure was caused by ongoing fighting between forces loyal to warring generals in Sudan.

The East African country has been engulfed by chaos since April 2023, when the Sudanese Armed Forces started battling the Rapid Support Forces militia following a dispute over how Sudan would transition to civilian rule.

As the RSF looked to expand its territory in Sudan late last year, its fighters took key towns along the pipeline route, chasing away engineers and forcing the Juba government into negotiations with the RSF.

Oil-dependent and landlocked, South Sudan produces around 160,000 b/d of crude, compared to Sudan's 50,000 b/d, but relies entirely on its northern neighbor to export its crude from Port Sudan, through the pipeline via Khartoum.

On Feb. 28, South Sudan's information minister said the war in Sudan, flooding of oil fields and recent attacks on ships transiting the Red Sea by Yemen's Houthi rebels had curtailed its crude exports.

"An amalgamation of factors has derailed our efforts to take crude to international markets but attacks on the pipeline by Sudan conflict, conflict in [the] Red Sea, and delays in shipping at the sea have affected us greatly," Michael Makuei Lueth said.

Early in the Sudan conflict, the price of South Sudanese crude suffered when shippers refused to dock at Port Sudan.

Platts, part of S&P Global Commodities Insights, assessed Nile Blend crude at $80.13/b on Feb. 29, a $3.56/b discount to Dated Brent.