South Sudan said it will shut down its oil industry next week ahead of a deadline Sudan set for companies in its territory to stop receiving South Sudan’s crude.

Stephen Dhieu Dau, South Sudan’s oil minister, told a news conference on Tuesday that his country was shutting down production ahead of Khartoum’s deadline in August to avoid damage to South Sudan’s oil industry caused by a sudden shut-off. Mr. Dau said South Sudan’s oil sector would be completely stopped by July 31.

This will be South Sudan’s second major oil shut down since it peacefully broke away from Sudan in 2011. South Sudan derives almost all its government budget from the oil industry, but the south’s oil can only be shipped to market via Sudan’s pipelines.

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