Angola to leave Opec amid reduced production quota

Angola is set to leave Opec, the country’s Minister of Mineral Resources, Oil and Gas Diamantino Azevedo announced.

The decision was made at a session of the Council of Ministers, led by the country’s President Joao Lourenco, Angolan news agency Angop reported.

Angola joined the oil producers’ group in 2007.

Oil prices dropped further after the announcement on Thursday, with Brent, the global benchmark for two thirds of the world’s oil, down by 1.68 per cent to $78.37 a barrel at 6pm UAE time. West Texas Intermediate, the gauge that tracks US crude, was trading 1.63 per cent lower at $73.02 a barrel.

“Back at the Opec+ June meeting, there was an agreement that independent companies will review the production quotas of three Opec member states,” UBS strategist Giovanni Staunovo said.

“The conclusion was that Angola’s production quota was massively reduced and the country did not like that cut.”

The 2024 production quotas decided in June included a lower target for nine of the 23 Opec+ member countries, including Russia, Nigeria, Angola, Malaysia, Azerbaijan, Brunei and Sudan.

Angola was last month given a target of sticking to output of 1.11 million barrels a day next year.

“From an oil market supply perspective, the impact [of Angola’s exit] is minimal as oil production in Angola was on a downward trend and higher production would first require higher investments,” Mr Staunovo said.

“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.”

In a meeting last month, Opec+ members extended their voluntary oil output reductions until the end of the first quarter of next year, amid concerns over fuel demand.

Opec+ has total production cuts in place of 3.66 million bpd, which includes a two million bpd reduction agreed on last year, as well as voluntary cuts of 1.66 million bpd announced in April.

Oil prices, which briefly touched $98 in September, are now down about 25 per cent due to concerns of a demand slump, despite predictions of a tight crude market by the International Energy Agency and Opec.

The group this month stuck to its oil demand growth forecast for 2023 and 2024 and said it expected “resilient” gross domestic product growth around the world to support crude demand next year.

Global oil demand growth forecast for this year was unchanged from last month’s estimate at 2.5 million bpd.

Next year, demand is expected to grow by 2.2 million bpd.