Angola's withdrawal from the Organization of the Petroleum Exporting Countries (OPEC) has been officially announced due to a disagreement over production quotas. The decision comes in the wake of OPEC's recent resolution, joined by 10 allied nations, to further reduce oil production in 2024 to stabilize fluctuating global prices.
With a current daily production of approximately 1.1 million barrels out of OPEC's total of 30 million, Angola's departure had an immediate impact on oil prices. Brent prices experienced a drop of over $1 to $78.5 per barrel following the announcement during Thursday's cabinet meeting.
Minister of Mineral Resources and Petroleum, Diamantino Azevedo, explained the rationale behind the decision, stating that Angola perceives no benefit in continuing its OPEC membership given the potential obligation to cut production. This move, according to Azevedo, contradicts Angola's policy of avoiding production decline and respecting existing contracts.
Azevedo emphasized that the decision was not made lightly, pointing out that Angola and Nigeria, the two largest oil exporters in sub-Saharan Africa, have expressed dissatisfaction with production cuts while aiming to boost their foreign currency earnings.
Despite being one of the world's fastest-growing economies with significant mineral and petroleum reserves, Angola faces economic disparities. Much of its oil wealth is concentrated in the Cabinda province, where a prolonged separatist conflict persists.
Angola's departure from OPEC follows a trend set by other countries like Ecuador, Indonesia, and Qatar. OPEC, responsible for determining global crude oil sales, operates in conjunction with an extended group known as OPEC+.
The global oil market has experienced volatility, notably after Russia's invasion of Ukraine in February 2022, which drove oil prices beyond $120 per barrel in June of that year. Although prices dipped to just above $70 a barrel in May, recent attacks on cargo vessels in the Red Sea, coupled with producers' efforts to limit output, have contributed to a steady increase in oil prices.