Saturday, July 13, 2024

Angola Announces Withdrawal from OPEC Amid Output Quota Dispute

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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.

9 COMMENTS

  1. Good for Angola. Stand up for your country unlike here in zambia where we have a chola boy for the west as president. Eeembwa ni hh

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  2. To follow up on what I said in my IMF-story-post in response to @Bernard, Angola’s move could shake OPEC so much that the group stops acting to collectively influence the price of oil. This if they lure other members in Africa. Africa has the biggest number of OPEC members.
    One would suspect the US who have the biggest interests in Angolan oil has a hand in this move as they would want to control the price. OPEC has in the past few months been under pressure to embargo oil sales to Israel so the US is trying to interfere with such a move.

    • I still stand by what I had said that Copper is not a need like oil. Look, if oil was a want, then why is the US trying to interfere as you allege on the embargo on sales to Israel? I have noticed that there is a drop in price of oil on the World Market. This means that @Fresha, countries now will be buying more oil, the demand shall with time increase. Watch the space.

  3. Hallo Kaizar Zulu my friend. I have looking for you. With the aim of capturing you and and hand over to the Police. Are you now back in Zambia?

    • Where can I go, eeembwa iwe? I have always been home in ibex with my family and loved ones. My businesses are booming abroad and here. Come and try to arrest me if you man enough. I will beat you like a school boy caught stealing sugar.

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