Oil Tumbles After Angola Announces It Is Leaving OPEC

Tyler Durden's Photo
by Tyler Durden
Thursday, Dec 21, 2023 - 01:29 PM

Confirming a move which had been widely expected after the internal acrimony at the last OPEC+ meeting, moments ago Angola - also known as China's gas station in Africa - announced it was leaving OPEC, the country's news agency ANGOP reported on Thursday, quoting the African producer’s oil minister Diamantino de Azevedo.

The decision was taken at a meeting of the Council of Ministers, led by the President of the Republic, João Lourenço, the news agency noted. Jornal de Angola also reported the news.

As OilPrice notes, Angola and another African OPEC member, Nigeria, had a spat with the other cartel members before the latest meeting regarding their oil production quotas.

At a meeting in June, Angola and Nigeria were given lower crude oil production quotas as part of the OPEC+ agreement, after the two producers had underperformed and failed to pump to their quotas for years, due to a lack of investment in new fields and maturing older oilfields.

The most recent spat within OPEC about the African countries’ quotas was one of the reasons for the cartel to postpone its latest meeting within a few days.

African OPEC members Angola, Congo, and Nigeria were forced to commit to lower output in 2024, and the originally scheduled November 26 meeting could potentially have pressured them to make further production cuts, as the Saudis expressed discontent over compliance with the deal as it shoulders the bulk of the burden. 

Before the meeting at the end of November, Angola said it was not considering quitting the cartel.

“There’s no thinking in that direction,” Angola OPEC governor Estevao Pedro told Bloomberg at the time, assuring markets that Africa’s second-largest producer had no intentions of rocking the boat to that extent.

However, it seems now that Angola doesn’t see an OPEC membership as beneficial anymore after the recent spats over its production quota.  

Angola, which joined OPEC in 2007, holds untapped oil and gas resources estimated at 9 billion barrels of proven crude oil reserves and 11 trillion cubic feet of proven natural gas reserves.  

The news sent oil, which had caught a bid in recent days on fears about a protracted Red Sea blockage, sharply lower and back to Tuesday levels.