Amid disagreement with the production quotas set by the cartel, Angola decided to withdraw from the Organization of the Petroleum Exporting Countries (OPEC), judging that it was time to “focus more” on its own “interests.”
“So far we have not had any influence on the quotas, but, if we were to remain in OPEC, we would suffer the consequences of the decision to respect the production quotas,” explained Thursday, December 21 Diamantino de Azevedo, Minister of Natural Resources, Oil and Gas, on Angola’s Public Television (TPA). The country would then be “forced to reduce its production, which goes against our policy of avoiding any decline and respecting contracts,” he added.
The country’s decision was taken following a council of ministers, held Thursday at the presidential palace in Luanda, a press release from the presidency subsequently clarified. It was transformed the same day into a decree with the force of law, signed by the president, Joao Lourenço. Contacted by Agence France-Presse, OPEC, whose headquarters is in Vienna, did not react immediately.
The price of a barrel of oil weighed down by the departure from the country
At the end of November, Angola and Nigeria, the two oil heavyweights of the African continent, showed themselves unhappy with their quota, revised during the last ministerial meeting of the alliance, also postponed for several days due to disagreements. The organization has decided to reduce its production overall in order to support oil prices.
For Angola, OPEC had established a quota of 1.11 million barrels per day. But the country wants to aim for its own production target, set at 1.18 million barrels per day.
OPEC and its ten OPEC allies seem to have lost their influence in recent times, between dissensions, American competition and feverishness in the face of the climate emergency. Ecuador was the latest country to leave the organization on January 1, 2020.
The announcement of Angola’s departure from the cartel resulted on Thursday in a widening of oil losses, prices already being weighed down by expectations of sluggish economic demand. Despite new cuts announced in November, crude prices remain stuck at their lowest since June (between 70 and 80 dollars per barrel), while remaining above the average of the last five years.
In mid-December, during COP28 in Dubai, countries around the world approved a historic compromise paving the way for the gradual abandonment of fossil fuels, which cause global warming. The text calls for “leading a transition away from fossil fuels in energy systems, in a fair, orderly and equitable manner, by accelerating action in this crucial decade”.
Founded in 1960, OPEC, which now brings together twelve members under the leadership of Riyadh, formed an alliance in 2016 with ten other countries, including Russia, in the form of an agreement called OPEC, with the aim of limiting supply and support prices in the face of the challenges posed by American competition.