Angola said on Thursday it would leave the Organization of Petroleum Exporting Countries (OPEC), saying the group no longer served its interest.
Angola is the third oil producer after Ecuador and Qatar to leave the cartel in the last 10 years.
“We feel that … Angola currently gains nothing by remaining in the organisation and, in defense of its interests, decided to leave,” Angola’s Oil Minister Diamantino Azevedo was quoted as saying in a presidency statement.
The exit is seen as a blow to the Saudi-led oil producer group that has sought in recent months to rally support for further output cuts to prop up oil prices.
Analysts say while Angola’s exit may not have any major impact on OPEC’s control of the oil market, given the country’s mid-sized production volume, the exit raises questions about OPEC’s unity.
“From an oil market supply perspective, the impact is minimal as oil production in Angola was on a downward trend and higher production would first require higher investments,” Giovanni Staunovo of UBS told Reuters.
“However, prices still fell on concern of the unity of OPEC+ as a group, but there is no indication that more heavyweights within the alliance intend to follow the path of Angola.”
Bill Weatherburn of Capital Economics agreed. “Angola’s exit from OPEC is symbolic but won’t have a meaningful impact on OPEC’s market power or global oil supply. Angola is a relatively small oil producer and is likely to struggle to raise production much further, even if it is now free from OPEC quotas.”
Oil prices fell by as much as 2.4% on Thursday following the news.
Angola’s Trouble
Angola’s departure follows its protest about OPEC+’s decision to cut its output quota for 2024. The country has been unable to produce enough oil to meet its OPEC+ quota in recent years.
Like Angola, Nigeria has struggled to meet OPEC quota but wants a higher quota next year.
While OPEC boosted Nigeria’s quota in November, the increase was lower than Nigeria had sought. It means Nigeria would not produce more even if it is able to do so in 2024.
Nigeria has not indicated it plans to exit the group.
OPEC Fall?
Angola joined OPEC in 2007. It produces about 1.1 million barrels of oil a day, compared with 28 million bpd for the whole group.
Angola’s departure leaves OPEC with 12 members. The group controls about 27% of the 102 million bpd world oil market.
OPEC’s share of the world market stood at 34% in 2010.
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