Angola's Departure Deals Blow to OPEC as It Leaves Saudi-Led Producer Group
Shafaq News/ Angola announced on Thursday its decision to exit the Organization of the Petroleum Exporting Countries (OPEC).
Angola's Oil Minister, Diamantino Azevedo, cited that OPEC no longer served the country's interests. This move follows the footsteps of other mid-sized producers, Ecuador and Qatar, who left OPEC in the past decade.
Azevedo stated in a presidency statement, "We feel that ... Angola currently gains nothing by remaining in the organization and, in defense of its interests, decided to leave." The departure of Angola, a member since 2007, comes when OPEC has been working to garner support for additional output cuts to stabilize oil prices.
The news led to a nearly 2% drop in oil prices, with analysts expressing concerns about OPEC's unity. While acknowledging the impact on prices, UBS analyst Giovanni Staunovo noted, "There is no indication that more heavyweights within the alliance intend to follow the path of Angola."
With a daily oil production of about 1.1 million barrels, Angola is a minor contributor to OPEC's total output of 28 million barrels daily. The country has struggled to meet its OPEC quota since 2019 and faces challenges reversing falling output. Last month, Azevedo's office opposed OPEC's decision to reduce its production quota for 2024, potentially limiting Angola's ability to increase output.
OPEC has not yet commented on Angola's departure. The move surprised OPEC delegates, and the reasons for the decision are intertwined with Angola's struggles to boost oil production and navigate disagreements over African output quotas within the organization.
Oil and gas exports form a crucial part of Angola's economy, constituting approximately 90% of total exports. The country has been working to diversify its economic reliance on oil exports, especially after facing challenges from the COVID-19 pandemic and a decline in global fuel prices. Angola hosts several major oil companies, including TotalEnergies, Chevron, ExxonMobil, and the Azule Energy joint venture between Eni and BP.
