The South African nation of Angola has decided to exit the oil cartel, the Organization of the Petroleum Exporting Countries (OPEC).
Angola’s oil minister, Diamantino Azevedo, on Thursday, said its decision to leave was because its membership in the bloc because its membership no longer serves the country’s interests.
“We feel that … Angola currently gains nothing by remaining in the organisation and, in defense of its interests, decided to leave,” Azevedo said in a presidency statement.
Given Angola’s small percentage share of OPEC’s overall output, the withdrawal is unlikely to have a major effect on oil supplies, but analysts said it raises concerns about the unity of the petroleum group.
The Saudi-led club of oil producers has recently been trying to get support for additional output restrictions aimed at maintaining oil prices.
Angola’s move follows Qatar and Ecuador, two other mid-sized producers who have quit OPEC in the past ten years.
Oil prices dropped by around 2% after the country’s announcement to withdraw from the group.
“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,” UBS analyst Giovanni Staunovo said.
Angola, which joined OPEC in 2007, produces about 1.1 million barrels of oil per day, compared with 28 million bpd by the whole group.
Three OPEC delegates who spoke under anonymity 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.
In October, a senior government official stated that it has failed to stop output declines since reaching a peak of 2 million bpd in 2008 but anticipates continuing to produce at current levels through 2024.
Azevedo’s office objected last month to an OPEC decision to reduce its production quota for 2024, which may have limited its potential to boost output.
Disagreements on the output limits for Africa had earlier contributed to the postponement of a meeting of the larger OPEC+ oil producer group.
Angola’s economy is sustained by oil and gas exports, which account for around 90% of total exports.
The government has been seeking to reduce over-dependence after it was greatly affected by the COVID-19 pandemic and lower fuel prices globally.
Many oil majors and independents operate in Angola including Chevron (CVX.N), TotalEnergies (TTEF.PA), ExxonMobil (XOM.N) and more.
