Angola said on Thursday that it would withdraw from the Organization of the Petroleum Exporting Countries (OPEC), dealing a blow to the Saudi-led group of oil producers. In recent months, OPEC has been seeking support for further production cuts to support oil prices.
Angola's oil minister, Diamantino Azevedo, said the Organization of the Petroleum Exporting Countries (OPEC) is no longer in Angola's interests. Medium-sized oil producers such as Ecuador and Qatar have exited OPEC over the past decade.
We felt ......Angola does not have any benefit in remaining in the organization at the moment, and in order to defend its interests, it was decided to withdraw. Azevedo said in a presidential statement.
International oil prices on Thursday**24%, analysts said Angola's withdrawal raises questions about the unity of OPEC and OPEC+, a broader organization that includes Russia and other OPEC allies. OPEC+ began implementing a new round of oil production cuts in January in an attempt to strengthen the market.
Giovanni Staunovo, an analyst at UBS, said: "Due to concerns about the unity of OPEC+ as a bloc, there is no indication that there are more heavyweights in the alliance intending to follow in Angola's footsteps."
Angola's announcement of its withdrawal from OPEC comes after Angola raised its decision to cut OPEC+'s production quota for 2024. The dispute helped postpone OPEC+'s last policy meeting in November and delayed its agreement on new output limits.
Ali Al-Riyami, former marketing director of Oman's energy ministry, said: "This shows that there is no consensus within OPEC, which has been going on for some time.
There will undoubtedly be consequences, but I don't think other (countries) will follow suit. ”
Nigeria, another African member of OPEC, has been trying to increase production but has been trying to meet its quotas. At its November meeting, it received a higher 2024 OPEC+ target, which, although lower than it expected, limited its ability to increase production, if it was able.
OPEC did not respond to a request for comment.
*Decline in market share*
Three OPEC representatives, speaking on condition of anonymity, said Angola's decision to withdraw from OPEC came as a surprise because they had expected the dispute over Angolan quotas to dissolve.
Angola joined OPEC in 2007 and produces about 1.1 million barrels of oil per day, compared to 28 million barrels per day for OPEC as a whole.
Angola's withdrawal will leave OPEC with 12 members, producing about 27 million barrels per day, or about 1 of the world's oil market0.2 billion barrels per day, 27%.
This further reduced OPEC's share of the world market, which stood at 34% in 2010.
In addition to the withdrawal of some member countries, the decision to cut production by OPEC and OPEC+, as well as the increase in production in non-OPEC countries, including the United States, have reduced their market share.
Brazil is expected to join OPEC+ in January, but will not participate in the group's coordinated production cap.
In recent years, Angola has been unable to produce enough oil to meet OPEC+ quotas due to declining investment and lack of large-scale new field development.
A senior *** said in October that the country had been working to reverse the decline in production since peaking at 2 million barrels per day in 2008 and was expected to maintain current output until 2024.
For Angola, which accounts for around 90% of total exports, the country has been looking to reduce its over-reliance on oil and gas after the pandemic and global fuels hit the country's economy hard.
Several oil majors and independent companies operate in the southern African country, including Totalenergies, Chevron, ExxonMobil and Azule Energy, a half-joint venture between Eni and BP.