(Luanda) Angola has decided to withdraw from the Organization of the Petroleum Exporting Countries (OPEC), amid disagreement over oil production quotas, judging that it was time to “focus more” on its own goals.
“So far we have not had any influence on the quotas, but if we were to stay in OPEC we would suffer the consequences of the decision to respect the production quotas,” Diamantino de Azevedo explained on Thursday , Minister of Natural Resources, Oil and Gas, on public television TPA.
Angola would then be “forced to reduce its production, which goes against our policy of avoiding any reduction and respecting contracts”.
At the end of November, Angola and Nigeria, the two oil heavyweights on the African continent, showed themselves unhappy with their quotas during the last ministerial meeting of the alliance, which was also postponed for several days due to disagreements.
OPEC had established a quota of 1.11 million barrels/day for Angola, which the country strongly contests, aiming for its own target of 1.18 million barrels/d.
Angola’s decision was taken following a Council of Ministers, held Thursday at the presidential palace in Luanda, a presidential statement said. It was transformed the same day into a decree with the force of law, signed by President João Lourenço.
“At present, Angola gains nothing by remaining in the organization and, to defend its interests, it has decided to leave it,” the minister explained to the press gathered at the presidency, according to this press release.
“When we see that we are in organizations and that our contributions, our ideas, have no effect, it is better to leave”, underlined the minister, after the country’s accession in 2007.
Contacted by AFP, OPEC, whose headquarters is in Vienna, did not react immediately.
“More relevant”
If “the impact on the international reputation of the group will be less” than in the event of the departure of “a more important producer”, such as Iraq, Saudi Arabia or the United Arab Emirates, “the moment of announcement could not be worse, as the cartel works hard to convince its members to voluntarily reduce their production in order to support prices,” said Ricardo Evangelista, analyst at ActivTrades, interviewed by AFP.
Despite new cuts announced in November, crude prices remain stuck at their lowest since June (between $70 and $80 per barrel), while remaining above the average of the last five years.
The announcement of the country’s departure resulted in a widening of oil losses, prices already being weighed down by expectations of sluggish economic demand.
Around 10:30 a.m. (Eastern time) (4:30 p.m. in Paris), the price of a barrel of Brent from the North Sea for delivery in February dropped 0.94% to $78.95. Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery the same month, lost 0.96%, to $73.51.
OPEC and their 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.
“We have always done our duty, but Angola saw fit to leave. The time has come for our country to focus more on its objectives,” the minister further justified on television.
Angola has been very active “but our role within the organization no longer seems relevant to us at present,” he said. “The current results do not serve our interests.”
Founded in 1960, OPEC, which brings together 13 members under the leadership of Riyadh, formed an alliance in 2016 with ten other countries, including Moscow, in the form of an agreement called OPEC +, with the aim of limiting the offer and support courses in the face of the challenges posed by American competition.
This departure from Angola could therefore be part of President João Lourenço’s strategy “which consists of promoting close ties with the United States”, underlines Marisa Lourenço, political and economic risk analyst specializing in the region.
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 causing global warming, calling for “leading a transition away from fossil fuels in energy systems , in a fair, orderly and equitable manner, accelerating action in this crucial decade.”