Sudan will not allow South Sudan to export any oil through its territory unless the two states settle all disputes over border security, President Omar Al-Bashir said on Tuesday.
Oil, security and frontier disputes ignited border clashes last month and for a while raised fears of full-blown war in one of Africa's most significant oil regions.
South Sudan took three quarters of Sudan's oil production when it became independent in July under a 2005 peace agreement that ended decades of civil war with Khartoum.
The landlocked new nation needs to export its oil through Sudan but has failed to agree with Khartoum how much it should pay. It shut down its output of 350,000 barrels a day in January after Sudan started seizing oil for what the latter calls unpaid fees. Oil is the lifeline for both economies.
In a speech in Khartoum, Bashir reiterated Sudan would not allow Juba to export its oil through northern pipelines unless both sides sorted out all disputes over border security.
"They shut it [the pipelines] down but the key [to reopening the pipes] is with us," Bashir told a rally to support the army.
"We are the ones who will determine when it will be opened. We will not allow the pipelines to open unless there is a 100 per cent guarantee for our security ... and that there is no threat to our citizens and our borders," he said.
Sudan accuses Juba's ruling party, the Sudan People's Liberation Movement, of backing its civil war ally, the Sudan People's Liberation Movement-North, which is fighting the army in Sudan's South Kordofan and Blue Nile states.
South Sudan and residents in the southern borderland accuse Sudan of repeated aerial bombardments, charges Khartoum denies.
The U.N. Security Council endorsed on 2 May an African Union plan demanding that Khartoum and Juba cease hostilities, withdraw troops from disputed areas and resume talks within two weeks on all outstanding disputes.
It gave them three months to resolve the issues, under threat of sanctions.
Apart from oil and border security both countries also need to find a solution for the disputed border region of Abyei.