The Saudi-led club of oil producers, OPEC, has been trying in recent months to get support for more output cutbacks aimed at maintaining oil prices. Angola said on Thursday that it would be leaving the organization.
The Organization of the Petroleum Exporting Countries, according to Angola’s oil minister, Diamantino Azevedo, is no longer in the nation’s best interests. It follows Qatar and Ecuador, two other mid-sized producers who have quit OPEC in the past ten years.
“In defense of its interests, Angola decided to leave the organization because we feel that it currently gains nothing from being there,” Azevedo was cited as saying in a statement from the presidency.
Analysts noted that the departure sparked doubts about OPEC’s unity, which caused oil prices to drop by over 2%.
“Prices fell on concern of the unity of OPEC+ as a group, but there is no indication that more heavyweights within the alliance intend to follow the path of Angola,” Giovanni Staunovo, an analyst at UBS, stated
Angola, a 2007 OPEC member, produces approximately 1.1 million barrels of oil per day, while the organization as a whole produces 28 million barrels.
OPEC did not respond to a request for comment right away.
Speaking under anonymity, three group delegates stated that Angola’s decision to withdraw was unexpected.
Since 2019, the nation’s oil production has not been sufficient to meet its OPEC quota.
A senior government official stated in October that it has failed to stop output declines since reaching a peak of 2 million bpd in 2008 and anticipates continuing to produce at current levels through 2024.
Azevedo’s office objected last month to an OPEC decision to reduce its production allotment for 2024, which may have limited its potential to boost output.
Earlier, disagreements on the output limits for Africa had contributed to the postponement of a meeting of the larger OPEC+ oil producer group.
Angola’s economy depends heavily on its oil and gas exports, which make up about 90% of all exports. The government has been working to lessen this over-reliance since the country was severely impacted by the COVID-19 pandemic and falling gasoline prices globally.
Eni and BP jointly own Azule Energy, a 50/50 joint venture, and TotalEnergies, among other big and independent oil companies operating in the country of southern Africa.
