Output quota disputes force Angola to quit Opec oil cartel
In response to a disagreement on output quotas, Angola has announced that it will be withdrawing from the Organisation of the Petroleum Exporting Countries (OPEC).
In an effort to stabilise volatile global prices, the thirteen-member cartel and ten associate governments decided a month ago to further restrict oil production in 2024. The following transpires as a consequence of this decision.
At the moment, Angola is also responsible for contributing around 1.1 million barrels per day to the overall 30 million barrels that are generated by Opec during the day.
Sources reported that as of 12:50 GMT, the price of a barrel of Brent crude had dropped by more than $1, reaching $78.5. This was in response to the news. During the cabinet meeting that took place on Thursday, Angola made the decision to resign from the Organisation of the Petroleum Exporting Countries (OPEC).
The Minister of Mineral Resources and Petroleum, Diamantino Azevedo, made the following statement after the event: “We feel that at this moment Angola benefits nothing by remaining in the organisation, and in defence of its interests, it opted to depart.”
“If we continued to be a member of the Organisation of the Petroleum Exporting Countries (OPEC), Angola would be compelled to reduce production, which defies our objective of avoiding decline and honouring obligations.” However, the minister went on to say that the decision was not made flippantly.
Within the sub-Saharan African region, the two countries that export the most oil are Angola and Nigeria. It has been reported that both nations have expressed their dissatisfaction with the request to reduce production at a time when they are making efforts to improve their profits in foreign currency.
There are massive mineral and petroleum reserves in Angola, and the country’s economy is among the fastest-growing in the world; yet, the growth of the economy is highly uneven everywhere.
Its distinct Cabinda province, which has been the site of a separatist dispute for decades, is where a significant portion of its oil resources is located.
Angola, which had been a member of the Organisation of the Petroleum Exporting Countries (OPEC) for sixteen years, is not the first country to exit the cartel. Qatar, Ecuador, and Indonesia have all followed the same course of action.
Along with an expanded group known as Opec+, the Organisation of the Petroleum Exporting Countries (OPEC) is a grouping of oil producers that decides how much crude oil to sell on the global market.
As a result of Russia’s full-scale invasion of Ukraine in February 2022, the price of oil skyrocketed, reaching more than $120 a barrel in June of the previous year.
In May of this year, they returned to a level that was slightly higher than $70 a barrel; nevertheless, they have been slowly climbing ever since then. This is due to the fact that producers have attempted to limit their output in order to support the market, as well as the recent attacks on cargo vessels in the Red Sea.