It will also bolster Israeli moves to counter Iranian inroads into the Red Sea and a major gunrunning route from the Revolutionary Guards base at Bandar Abbas in the Persian Gulf to the Gaza Strip via Sudan.
South Sudan, which became independent of Arab-ruled Sudan in July 2011 after a decades-long civil war, is locked in a frequently violent confrontation over its oil reserves with the military-run Khartoum regime, an ally of Iran, under President Omar al-Bashir.
Sudan has become a battleground in the mostly clandestine war between Israel and the Islamic Republic, which funnels missiles and other arms for Palestinian militants in the Gaza Strip through the Red Sea.
South Sudan's petroleum and mining minister, Dhieu Dau, announced the oil deal last week after he returned from a visit to Israel.
He said negotiations were ongoing with Israeli companies, which he did not identify, seeking to invest in South Sudan.
Dau indicated the southern government in Juba, ramshackle capital of the infant state, hoped to export oil to Israel, but observed that this could not happen before March.
He gave no indication how the landlocked south would achieve this, or what volume of crude would be involved. But it's a move Khartoum would do everything possible to wreck.
South Sudan sits on around 80 percent of Sudan oil reserves, which total 6.6 billion barrels, according to the BP Statistical Review.
This gives the south, which is overwhelmingly Christian and animist, immense economic leverage over the Muslim Arab regime in Khartoum, which depended on oil revenues to prop up its economy.
But Khartoum controls the only export pipelines from the landlocked south that run through the north to Port Sudan on the Red Sea.
Most of the oil fields lie along the border between the two parts of Sudan, and there have been repeated military clashes as both sides seek control of the reserves.
Israel made several large natural gas strikes offshore starting in 2009, transforming its economy, which since the state's creation in 1948 has depended entirely on imported energy.
It currently receives much of its oil from Azerbaijan, the former Soviet republic that lies on Iran's northern border, another arena in the covert war between Israel and the Islamic Republic.
The prospect of Israel actually getting oil from South Sudan remains uncertain, given Juba's difficulties with Khartoum.
There has been talk of building a 1,000-mile export pipeline from South Sudan across Kenya to the Indian Ocean that would free Juba from reliance on Khartoum's pipelines.
But no definite plans for the project, expected to cost around $2 billion, have yet materialized.
It may be that Israeli companies are seeking to help out in that regard -- if only to undermine the Islamic-oriented Khartoum regime and its alliance with Tehran, and to gain access to the Nile River, Egypt's primary source of water and a strategic target.
During Sudan's civil war, one of Africa's longest conflicts in which some 2 million people died, Israel provided the southern rebels with arms, training and funding, as it has done in other parts of Africa seeking to weaken its Arab adversaries.
That support began in 1967, and intensified after Bashir seized power in an Islamist-backed military coup in 1989.
The aid is no doubt continuing in an effort to help the Juba government under President Salva Kiir, leader of the Sudan People's Liberation Movement, defy Khartoum.
Kiir visited Israel in December 2011.
Israel recognized the infant state on July 10, 2011, the day after its formal separation from Khartoum under a 2005 peace agreement that ended the civil war.
With Islamic parties making critical gains in free parliamentary elections across North Africa amid the wave of pro-democracy uprisings that began in January 2011, Israel is scrambling to counter this with new alliances on its periphery.
Israel's deeply alarmed at the empowerment of the Muslim Brotherhood in Egypt, endangering the landmark peace treaty Cairo signed with Israel in 1979, and the threat of Islamist regimes emerging in Jordan, which signed a peace deal in 1994, and Syria.
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