Could Sanctions Stem Darfur Bloodshed?

Sudan was a poor, conflict-torn country. Then oil joined the equation. But instead of using its oil money to alleviate poverty, the Khartoum regime is financing warfare and pro-government militias are being blamed for atrocities in the Darfur region. Oil sanctions may be the only way to force the Sudanese leadership to halt the violence in Darfur.

In August, the U.N. Security Council voted to deploy a 20,000-man force to monitor a truce in the fighting. And in November, Sudan agreed to a joint U.N.-African Union peacekeeping force. However, the Sudanese government refused to give command of the forces to the U.N.

Fighting in Darfur, where several rebel factions oppose Sudanese troops and pro-government militias, has escalated since the Security Council vote. At least 200,000 people have been killed and more than 2.5 million others have been displaced since fighting erupted in 2003.

The International Crisis Group has called for sanctions on Sudan’s petroleum industry. The group suggests sanctions should include “bars on imports, investment, and provision of technical support to the petroleum industry.” Sudan’s crude exports have increased sharply since the completion of a major oil-export pipeline in 1999. Oil exports amounted to $4.2 billion last year, 85 percent of the country’s export revenue. Petroleum sanctions could plunge the Islamic state into an economic and political crisis. But it’s doubtful that sanctions would have a dramatic effect on global crude prices as Sudan accounts for only 0.6 percent of the world’s oil supply.

Sudan's Daily Oil Production, 1999-2005

Dr. Max Ntangsi, an economics instructor at the University of Buea in Cameroon, told ET that sanctions “might slightly impact global prices in the short run.” But over the long term, the market would be likely to adjust quickly.

Sanctions would affect companies like ABB of Switzerland, which has investments in Sudan’s power grid, and Siemens of Germany, which supplies telecommunications systems to the main oil-producing consortium.

But they would most directly affect China, which buys about half of Sudan’s crude oil output. And that factor alone may prevent sanctions from becoming a reality, as China would likely block any vote for them by the Security Council.

© 2013 Energy Tribune

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