MOGADISHU, Somalia – Uneasy neighbors Sudan and South Sudan reached a deal on oil transit fees a day after a U.N. Security Council deadline passed for them to come to terms or face sanctions, it was announced Saturday.
South Sudan recently marked a year of independence from Sudan, but there has seemed little cause to celebrate. Earlier this year, the two countries tilted dangerously toward war in the wake of South Sudan’s decision in January to shut down oil production over the acrimonious dispute on the price Sudan charges to ship oil through its country.
The shutdown severely damaged the economies of both countries. As oil stopped flowing, consumer prices rocketed, shortages set in and currencies fell.
Although the two sides have agreed on a transit price, an intractable dispute over territory and their shared border was set aside until late September.
Landlocked South Sudan confirmed in a statement that it had agreed to pay $9.48 a barrel to move its oil through Sudanese pipelines until the end of 2015. The South Sudanese government is hoping that an alternative pipeline will be built through Kenya or another neighboring country by then, giving it the option of bypassing Sudan.
The deal came after U.S. Secretary of State Hillary Rodham Clinton visited the South Sudanese capital, Juba, and urged the government there to make peace with its neighbor.