Khartoum has released tankers loaded with South Sudanese oil that had been seized at Port Sudan in a row over pipeline transit fees.

Sudanese Oil Minister Awad al-Jaz said the move came as part of efforts to reach an agreement with South Sudan, which shut down oil production in protest at the seizure over the weekend.

Landlocked South Sudan took about three quarters of Sudan's oil output when it became independent in July 2011, but it still needs pipelines running through its northern neighbor to export crude. The dispute over pipeline transit fees is one of a number of unresolved issues troubling relations between the two countries.

Dispute is far from over

South Sudan's Minister of Minister of Petroleum and Mining, Stephen Dhieu Dau, said that the government in Khartoum had released 3.5 million barrels, but indicated that the latest round in this long-running dispute was far from over.

Three of the ships that were released had already been loaded when Sudan prevented them form sailing. Separately, Sudan has sold off at least one tanker of crude it had seized from the South. Meanwhile at least seven tankers were waiting to lift December and January cargoes, incurring additional costs of around $20,000 (15,240 euros) per day.

Earlier South Sudan had said it would only restart oil production after Khartoum and Juba had reached a deal covering border security and the disputed Abyei region.

Minister Dau added that any agreement would have to be overseen by the international community.

Sudanese Foreign Minister Ali Ahmed Karti had also said that a deal would likely hinge on border and security issues.

Inconclusive summit

South Sudan's President Salva Kiir and Sudan's President Omar Hassan al-Bashir failed to resolve the dispute at a meeting on Friday. UN Secretary General Ban Ki-Moon said he was greatly concerned that the dispute could reignite armed conflict and blamed a lack of political will on both sides. Most of the oil exported by South Sudan and Sudan is destined for China.

Author: Mark Caldwell (Reuters/AFP)

Editor: Daniel Pelz / rm