Angola to Withdraw from OPEC Amidst Disagreement on Production Quotas

Angola has announced its decision to exit the Organization of the Petroleum Exporting Countries (OPEC) following disagreements over oil production quotas. The move will reduce OPEC’s membership to 12 nations.

Diamantino Azevedo, the Minister for Mineral Resources, Petroleum, and Gas, revealed on public television that Angola, which currently produces approximately 1.1 million barrels of oil per day, perceives its departure from OPEC as a strategic decision aligned with the country’s interests.

Azevedo stated, “We feel that … Angola currently gains nothing by remaining in the organisation and, in defence of its interests, decided to leave.” Angola, a member since 2007, has faced challenges in meeting production quotas in recent years, joining other nations like Qatar and Ecuador in departing from OPEC over the past decade.

Debates within OPEC about potential production cuts, particularly those sought by leading oil producers like Saudi Arabia, have fueled discussions within the group. With Angola’s departure, OPEC countries will collectively produce around 27 million barrels of oil per day, constituting about 27 percent of the global supply.

While Angola’s role within OPEC was relatively modest, its exit prompts broader questions about the organization’s future. The announcement led to a decrease in crude prices by more than 1.5 percent.

Giovanni Staunovo, a commodity analyst with UBS, commented on the minimal impact from an oil market supply perspective, noting that Angola’s production was already on a declining trend, and higher production would necessitate increased investments. Despite concerns about the unity of OPEC+, there is no indication that other influential members within the alliance plan to follow Angola’s path.

Oil and gas contribute significantly to Angola’s economy, accounting for about 90 percent of the country’s exports. Last month, Azevedo’s office protested against an OPEC decision to reduce its production quota for 2024, expressing concerns about the potential adverse effects on Angola’s capacity to boost its output.

Angola’s oil production capacity reached its peak in 2008 at 2 million barrels per day but has since declined due to aging infrastructure.

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