Wed. May 29th, 2024

Angola has announced it is leaving the oil producers’ organisation Opec over a dispute on output quotas.

It follows last month’s decision by the 13-member cartel and 10 allied nations to further slash oil production in 2024 to prop up volatile global prices.

Angola currently produces about 1.1 million barrels per day, of the 30 million from the whole of Opec.

Oil prices fell on the news, with Brent prices down over $1 to $78.5 a barrel by 12:50 GMT, Reuters reports.

Why are the world’s big oil producers cutting supplies?
Angola’s decision to withdraw from Opec came at Thursday’s cabinet meeting.

“We feel that at this moment Angola gains nothing by remaining in the organisation and, in defence of its interests, it decided to leave,” Mineral Resources and Petroleum Minister Diamantino Azevedo said afterwards.

“If we remained in Opec… Angola would be forced to cut production, and this goes against our policy of avoiding decline and respecting contracts.”

The minister added that the decision was not taken lightly.

Angola and Nigeria are the two biggest oil exporters in sub-Saharan Africa.

The AFP news agency reports that both countries have been unhappy at being asked to cut production at a time when they need to increase their foreign currency earnings.

Angola has vast mineral and petroleum reserves, and its economy is among the fastest-growing in the world – but economic growth is highly uneven.

Much of its oil wealth lies in its separate Cabinda province, where a decades-long separatist conflict simmers.

Angola – which had been an Opec member for 16 years – is not the first country to leave the cartel. Ecuador, Indonesia and Qatar have all done the same.

Opec is a grouping of oil producers which decides how much crude oil to sell on the world market, along with an expanded group called Opec+.

Following Russia’s full-scale invasion of Ukraine in February 2022, oil prices soared, hitting more than $120 a barrel in June last year.

They fell back to a little above $70 a barrel in May this year – but have steadily risen since then as producers have tried to restrict output to support the market and after recent attacks on cargo vessels in the Red Sea.

By Joy

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