Angola’s exit from OPEC oil cartel causes decline in oil prices

Brent crude futures settled down 31 cents at $79.39 a barrel. U.S. West Texas Intermediate crude futures fell 33 cents to $73.89 a barrel.

Earlier in the session, both benchmarks were down by more than $1 after Angola said it was planning to leave the group, Reuters reported.

Angola’s Oil Minister Diamantino Azevedo said the Organization of the Petroleum Exporting Countries no longer served the country’s interests.

Last month, OPEC and its allies adjusted Angola’s oil production target for 2024 to 1.11 million barrels per day (bpd). Before this revision, there was an agreement in June allowing Angola to produce up to 1.28 million bpd, contingent upon assessments conducted by consultancies.

Angola sent a note of protest to OPEC over the decision earlier this month.

“Because the decision was not taken unanimously and was against Angola’s position, during the meeting we reiterated our proposal for a quota of 1,180,000 barrels of crude oil per day for 2024 and afterwards a note of protest was sent to the OPEC Secretariat,” Angola’s oil minister said in a statement.

Angola, which joined OPEC in 2007, produces about 1.1 million barrels per day, compared with 28 million bpd for the whole group. In recent years, Angola has been unable to meet its OPEC+ output quota because of declining investment.

With Angola’s exit from OPEC, the organization will now comprise 12 members, maintaining a crude oil production of approximately 27 million barrels per day (bpd), some 27% of the 102 million bpd world oil market.

The departure of Angola continues the trend of diminishing OPEC’s share in the world market, which was at 34% in 2010.

Factors contributing to this decline include the exits of certain members, OPEC and OPEC+ decisions to curtail production, and the increasing output from non-OPEC countries, notably the United States. These dynamics have put pressure on OPEC’s market share.

Alongside the exits of certain nations, smaller oil producers have joined OPEC in recent years. In 2017, Equatorial Guinea became a full member of the organization, and in 2016, Gabon re-joined OPEC. Additionally, Congo attained full membership in OPEC in 2018.