Sudan and South Sudan broke off their ten-day-long meeting in the Ethiopian capital of Addis Ababa June 7, with no agreement on how to resolve the conflict that has brought the two countries to the brink of war. They could not agree on the borders for a de-militarised buffer zone or a new date for further talks.

Khartoum and Juba did agree in principle to another ceasefire deal, including a commitment to end the fighting, withdraw their troops from each other’s territory and stop supporting and sheltering rebels and opposition forces. But several such deals, including an agreement to de-militarise the border areas, have been broken in the past.

Khartoum accused South Sudan of staking new claims to territory within Sudan, including crucially the Helig oilfields which Juba temporarily occupied and destroyed last April. In 2009 an international court ruling had assigned Helig to Sudan. Helig was the lifeline upon which Sudan’s economy depends because despite Sudan’s recent increase in wealth, this was entirely dependent upon oil, most of which now lies in land-locked South Sudan, and the transportation of South Sudan’s 300,000 barrels of oil per day through Khartoum’s pipeline to the Red Sea port city Port Sudan.

The talks were the first since the two countries came close to all out war last April. This followed months of skirmishes after Juba’s decision in January to shut down oil production, which accounts for almost all of its revenue, in a dispute with Khartoum over the fees to use its pipeline and accusations that Sudan had stolen $815 million worth of crude.

The talks were held under the auspices of the Thabo Mbeki-led African Union High Level Implementation Panel on Sudan (AUHIP), in response to a resolution of the United Nations Security Council calling on both sides to end their cross border attacks, return to negotiations and permit humanitarian access to affected populations in the two areas.

The UN resolution also included the nearly year-long armed conflict between the Sudanese government and rebel forces in South Kordofan and Blue Nile states, from which more than 140,000 people have fled. The resolution threatened sanctions—a position supported by Russia and China despite expressed reservations.

Since the cessation of hostilities in April, Sudan has continued with its military flights over South Sudan and there have been sporadic artillery and air attacks near the border. While both Khartoum and Juba have withdrawn their military forces from Abyei, South Sudan claims that Sudan has simply turned its 150 soldiers into policemen who are guarding an oil field in Abyei.

Last July, South Sudan declared independence from Sudan under the Washington-brokered 2005 Comprehensive Peace Agreement (CPA) that ended a 28-year civil war that had claimed two million lives. The CPA did not set out how the oil revenues would be shared or define the borders of the two states. It called for separate referenda in Abyei and Kordofan states—yet to be held—as to which country they would join.

The population of both countries, with the exception of the elite, faces increasingly desperate conditions.

Sudan faces soaring prices, a $2 billion budget deficit and an estimated $4 billion next year as a result of South Sudan’s secession and suspension of oil production, with no hope of obtaining Western loans or even Gulf money following the visit of the Iranian President Mahmoud Ahmadinejad to Khartoum last September. Sudan is fighting the rebel movements in South Kordofan and Blue Nile states and opposition forces in Darfur.

In South Sudan, the UN is providing food assistance to just 2.7 million people. Aid agencies estimate that half of the country’s 8.7 million people face “food insecurity” as basic commodities have risen by up to 200 percent. The UN estimates it needs $760 million to cover humanitarian needs this year, but has received only 32 percent of this sum. The situation is becoming increasingly serious as 375,000 South Sudanese are returning to the south. More than half a million South Sudanese still live in Sudan.

The ruling clique in Juba faces mounting discontent, rebel movements and ethnic clashes.

While the core of the conflict is the disagreement over oil revenues, Sudan/South Sudan has become the focus of growing competition for influence between the United States and China, which has secured the greatest influence in Sudan/South Sudan’s economy and oil resources.

Following South Sudan’s secession, Beijing began to court Juba, leading to an influx of Chinese nationals and businesses registering for oil, infrastructure and other commercial deals. This gathered pace after Beijing’s continued support for Khartoum led Juba to shut down oil production and expel a leading Chinese oil executive from the country. Beijing despatched envoys to meet with Salva Kiir, South Sudan’s president. In April, Kiir made his first visit to Beijing as president. China announced an $8 billion loan to build major infrastructure projects.

It was to weaken China’s influence—China’s oil contracts are with Sudan—that the US and its allies supported South Sudan in the civil war and its secession. It provided the impetus to develop its military capabilities in Africa with the formation of the United States Africa Command, or AFRICOM, in 2008, which it hopes to headquarter in South Sudan.

Following the overthrow of Gaddafi’s regime in Libya, which played a major role in the African Union (AU), the western powers are fostering the AU as their front as they did in the case of the Arab League in Libya and now Syria. The Security Council charged the AU with brokering the peace talks between Sudan and South Sudan.

To ensure that the AU toes the line, the Obama administration forced Malawi to cancel its hosting of an AU summit meeting July by threatening to withhold $350 million in aid. The AU had insisted that Sudan’s President, Omar al-Bashir, be allowed to attend.

Washington imposed economic sanctions against Sudan in the early 1990s for its alleged support for international terrorism and instigated Bashir’s indictment by the International Court (ICC) in 2009 on charges of war crimes, crimes against humanity and genocide in relation to the civil war in Darfur. The US is now demanding that he be arrested and sent to the Netherlands for trial. The AU has issued several resolutions ordering its members not to cooperate with the ICC over Bashir’s arrest.

The failure of the talks means there will be no let-up in the international contest to dominate the African continent and its substantial energy resources.