Sudan's President Omar al-Bashir has ended his threat to block South Sudan's oil exports after talks with its leader, Salva Kiir.
Sudan will abide by all agreements reached with the South after its independence in 2011, Mr Bashir said.
Mr Bashir had said Sudan would close its pipelines to oil from the South this Friday, accusing its neighbour of backing rebels.
South Sudan denied the charge and in turn accused Sudan of destabilising it.
South Sudan took with it nearly three-quarters of Sudan's oil production when it declared independence following decades of conflict.
"The agreements we signed call for the transport of South Sudan's oil through Sudan's facilities and ports," Mr Bashir said after the summit in Khartoum.
Mr Kiir said Sudan and South Sudan had to "close the old chapters and open a new page", AFP news agency reports.
"These two countries cannot always remain on a war footing. If they do that, they cannot offer services to their citizens," he is quoted as saying.
Mr Kiir also called for the reopening of their border for trade, a move agreed in September but not yet implemented by Sudan because of South Sudan's alleged support for rebels, Reuters news agency reports.
"You closed the border. We didn't do that but we're ready to reopen it within 24 hours," Mr Kiir is quoted as telling Mr Bashir.
He said South Sudan was not supporting the rebels fighting Mr Bashir's government and "this can be seen in reality", AFP reports.
The Sudanese army is fighting a rebel insurgency in at least three regions.
An umbrella rebel group called the Sudan Revolutionary Front (SRF) has launched attacks on several towns, briefly occupying the major city of Um Rawaba in central Sudan in April.
The two sides fell out over how much the South should pay to export its oil through Sudanese pipelines.
South Sudan, which gets 98% of its revenues from oil, has huge reserves but is landlocked and reliant on Sudan's ports for export.
At the height of the dispute last year, the South shut down its entire oil output, badly hitting the economies of both countries.
Production resumed in April this year but the following month, Mr Bashir threatened to turn off the taps once more.