Angola has declared its departure from the Organization of the Petroleum Exporting Countries (OPEC) following a dispute over output quotas. The decision comes after OPEC and allied nations agreed to further reduce oil production in 2024 to stabilize global prices. Angola, a key oil exporter in sub-Saharan Africa, currently produces approximately 1.1 million barrels per day, contributing to OPEC’s total of 30 million barrels.
The announcement led to a drop in oil prices, with Brent prices falling over $1 to $78.5 a barrel. Angola’s Minister of Mineral Resources and Petroleum, Diamantino Azevedo, stated that the country sees no benefit in remaining in OPEC, emphasizing its commitment to avoiding production cuts and respecting contracts.
Azevedo highlighted that the decision was made in defense of Angola’s interests, as remaining in OPEC would require mandatory production cuts. Both Angola and Nigeria, the largest oil exporters in sub-Saharan Africa, have expressed discontent with production cuts at a time when increasing foreign currency earnings is crucial.
Angola’s departure from OPEC, after 16 years of membership, adds to a list of countries, including Ecuador, Indonesia, and Qatar, that have exited the organization. The move raised concerns about OPEC’s unity and its broader coalition, OPEC+, which includes Russia and other allies.
As OPEC+ implemented new oil-output cuts in January, international oil prices fell by as much as 2.4%. Analysts suggest that Angola’s exit poses questions about the cohesion of OPEC and OPEC+.
Angola’s decision stems from a protest regarding OPEC+’s reduction of its output quota for 2024, leading to delays in the November policy meeting. The departure reduces OPEC’s share of the world oil market, standing at 27 million barrels per day, or 27% of the 102 million bpd global market.
Despite concerns about the impact on OPEC’s unity, analysts believe that other countries may not follow Angola’s path. Nigeria, another African OPEC member, has faced challenges meeting its quota and received a higher OPEC+ target for 2024 at the November meeting.
As Angola leaves OPEC, questions about the organization’s market share and effectiveness in managing global oil prices emerge. The move reflects the challenges faced by oil-producing nations amid evolving geopolitical and economic dynamics.