Angola to quit OPEC over oil production quotas disagreementThu, 21 Dec 2023 16:24:02 GMT

Angola said on Thursday it would leave OPEC over a disagreement on production quotas following the oil cartel’s decision last month to further slash output next year.Mineral Resources and Petroleum minister Diamantino Azevedo said that the decision was not taken lightly, but OPEC membership no longer served the African country’s interests. “We feel that at this moment Angola gains nothing by remaining in the organization and, in defence of its interests, it decided to leave,” the presidency quoted Azevedo as saying in a statement.The presidency said the decision was taken at a cabinet meeting chaired by President Joao Lourenco in the capital, Luanda.After the meeting, Lourenco signed a decree to officialise the matter, it said.Azevedo told state broadcaster TPA that Angola is unhappy with OPEC’s decision last month to further slash production next year in an effort to prop up volatile prices.”We think the time has come for our country to be more focused on our goals,” he told state broadcaster TPA.”If we remained in OPEC… Angola would be forced to cut production and this goes against our policy of avoiding decline and respecting contracts.” OPEC, headquartered in Vienna, did not immediately reply to a request for comment. – Diplomatic shift -Angola’s departure would hurt OPEC’s international standing less than if it was a bigger producer such as Iraq or Saudi Arabia, said ActivTrades analyst Ricardo Evangelista.The African country has a comparatively small output of about 1.1 million barrels per day.But the timing couldn’t be worse “when the cartel is working hard to convince its members to voluntarily reduce production in order to support prices,” Evangelista said.Angola is one of the largest oil exporters in Sub-Saharan Africa, alongside Nigeria.Both countries expressed dissatisfaction with their quotas at the November OPEC ministerial meeting as they seek to step up production to secure vital foreign currency.The meeting had to be postponed for several days because of disagreements.”When we see that we are in organisations and our contributions, our ideas, do not produce any effect, the best thing is to withdraw,” Azevedo said.The announcement caused a further drop in oil prices already weighed down by expectations of sluggish economic demand. The main international and US crude contracts fell more than 1.5 percent before trimming their losses.Crude prices are sitting near their lowest level in nearly six months despite the cartel’s announcement in November to further cut output.They have jumped in recent days as cargo shippers and oil firms say they will avoid using the Red Sea and Suez Canal because of drone and missile attacks by Huthi rebels. But they still remain below $80 a barrel.Nevertheless, crude prices remain above the average of the past five years.In an effort to prop up prices, the OPEC+ alliance has implemented supply cuts of more than five million barrels per day (bpd) since the end of 2022.Founded in 1960, the 13-member OPEC cartel in 2016 partnered up with 10 other producers to form OPEC+ to gain more clout. Discord among members has added to the challenges faced by the OPEC+, which is already contending with rising competition from increasing US crude production and a looming transition away from fossil fuels.Angola’s move fell in line with a recent diplomatic shift that has seen Luanda — long close to China and Russia — moving towards the United States, said independent analyst Marisa Lourenco, who specialises in the region.Leaving OPEC “shows where Angola’s foreign policy interests lie, and which it is pursuing with great intention,” she told AFP. Earlier this month nearly 200 states approved a first-ever call for the world to transition away from fossil fuels during the COP28 climate talks in Dubai.