Angola is leaving OPEC. What does that mean for the cartel?
Angola is leaving OPEC. What does that mean for the cartel?
Last month, OPEC, a group of oil exporting developing nations, lowered the cap on Angola’s oil production. Now, the country says it will leave OPEC.
Oil production in Angola has been falling for nearly two decades, according to Abhi Rajendran, director of oil markets research at Energy Intelligence.
“Back in sort of the mid-2000s, their oil production was closer to 2 million barrels a day and now it’s closer to 1 [million],” he said.
The drop means Angola hasn’t been meeting its OPEC quota. But the country doesn’t want to be limited by a new one, per Viktor Katona, head of oil analysis at Kpler.
“They care more about their long-term future than they care about sitting at the table with the big guys,” he said.
Since Angola doesn’t produce much oil, Katona said cutting ties won’t hurt the cartel’s supply. But it does hurt its image.
“For that semblance of cohesion within OPEC, this is a huge blow because also this shows that if someone is dissatisfied with what OPEC does, they might just as well leave,” he said.
Angola’s departure leaves OPEC with 27% of the world oil market. More than a decade ago, that number was nearly 35%.
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