There has been an announcement from Angola on Thursday stating that they will be withdrawing from the Organization of the Petroleum Exporting Countries (OPEC). According to analysts, while this move highlights longstanding tensions within the influential group, its impact on the market is expected to be limited.
Clay Seigle, the director of global oil service at Rapidan Energy Group, stated that this decision was not surprising as there were indications of it already last month. Speaking on CNBC’s “Last Call,” he explained that a disagreement about production baselines, which determine quotas and compliance, dominated a meeting of the extended OPEC+ group in November. Angola and Nigeria, both heavily reliant on oil, opposed efforts to deepen their baselines as they sought to increase their declining outputs. In light of these factors, Angola’s oil minister claimed that OPEC membership no longer served the country’s interests.
With Angola’s departure, OPEC now has 12 members, accounting for approximately 27 million barrels per day (bpd) of crude oil production, which represents about 27% of the global oil market, as per Reuters. Notably, Angola’s share of OPEC production was less than 4%, according to analysts at Scotiabank.
Angola’s decision to leave OPEC comes after Ecuador and Qatar departed from the organization in 2020 and 2018, respectively.
Source (CNBC)
