Angola Leaves OPEC in Major Blow to Saudi-Led Commodity Coalition
The southwest African country of Angola publicly announced Thursday its intention to leave the Organization of Petroleum Exporting States (OPEC), demonstrating the growing fractures within the Saudi-dominated bloc as some members push for greater output cuts amid a steep decline in oil prices.
Having joined OPEC in 2007, Angola produces only about 1.1 million barrels of oil per day (bpd) out of OPEC’s overall production of approximately 28 million bpd. Angola, regarded as a midsize oil exporter, maintains a similar production capacity to two other recently departed former OPEC states: Qatar and Ecuador.
With Angola’s departure imminent, OPEC’s crude oil production will stand at 27 million bpd, or 26% of the overall 102 million bpd globally. OPEC’s share of the oil market has fallen considerably in the past decade; the bloc’s share was 34% in 2010.
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Revealed in a presidential statement, Angolan Oil Minister Diamantino Azevedo is cited as saying that it would not serve the country’s needs to remain in OPEC. “Angola currently gains nothing by remaining in the organization and, in defense of its interests, decided to leave,” he said.
Angola’s decision to leave comes at the heels of a major dispute last month within OPEC+, the larger entity that includes other OPEC partners and Russia, regarding the directed cuts to the country’s assigned production quota for 2024. New output cuts within OPEC+, orchestrated by the leadership of Russia and Saudi Arabia, are set to go into effect in January 2024; however, the bloc’s growing fragmentation has the potential to spell serious long-term ramifications for its ability to shape the market. Saudia Arabia, the world’s largest oil-exporting nation, saw their exports increase by 9.6% in November despite production cuts.
Western nations have begun major pushes toward energy independence since Russia’s 2022 invasion of Ukraine. The United States, for example, has greatly expanded its oil production in the last year, flooding its domestic market with energy and recently becoming the largest oil-producing nation in history at 13.2 million bpd, weakening OPEC’s control over the oil market.
Commenting on Angola’s announcement, Ali Al-Riyami, former marketing head of Oman’s energy ministry, said that “this shows that there is no consensus within OPEC and [there has not] been for some time now.”
OPEC officials familiar with Angola’s frustration noted that since they had thought the disagreement would be resolved, the country’s announcement came as a huge surprise. International oil prices dropped by 2.4% on Thursday.
