Angola to leave OPEC over reduced oil production quotas

Business Friday 22/December/2023 08:15 AM
By: DW
Angola to leave OPEC over reduced oil production quotas

Angola on Thursday said it was leaving the Organization of the Petroleum Exporting Countries (OPEC) over a disagreement about oil production quotas.

The decision comes after the oil cartel decided last month to slash output further next year.

What was the reason given?

"If we remained in OPEC... Angola would be forced to cut production, and this goes against our policy of avoiding decline and respecting contracts," Mineral Resources and Petroleum Minister Diamantino Azevedo told state broadcaster TPA.

"We feel that at this moment Angola gains nothing by remaining in the organization and, in defense of its interests, it decided to leave," Azevedo said in a statement released by President Joao Lourenco's office.

Production cuts as oil price drops

OPEC has implemented supply cuts of more than five million barrels per day (bpd) since the end of 2022 to prop up prices.

Anticipating a drop in demand for 2024, the wider OPEC+ group last month agreed to a further voluntary cut of oil production by 2.2 million bpd in the first quarter.

Angola's production ceiling was already reduced in June to 1.28 million bpd from 1.45 million bpd, which OPEC said would better reflect its actual production.

"When we see that we are in organizations and our contributions, our ideas, do not produce any effect, the best thing is to withdraw," Azevedo said.

Angola's exit is a setback for OPEC, but it had a relatively small output compared with 28 million bpd for the whole group.