Angola, Africa’s second-largest oil producer, left OPEC after a lengthy dispute over its production quota, ending its 16-year membership. The withdrawal, announced by Oil Minister Diamantino Azevedo after a meeting chaired by President Joao Lourenco, followed a recent cut in Angola’s 2024 quota by 350,000 b/d. This reduces the Saudi-led group, which has been cutting production to support oil prices, to 12 members. However, the impact on the market will be minimal due to Angola’s declining output. In the last OPEC+ meeting in November 2023, Angola’s quota for 2024 was reduced from 1.46 million barrels per day (bpd) to 1.11 million barrels per day (bpd), slightly below its November production, which is 1.13 million barrels per day, according to the Platts OPEC Survey.
The dispute began in June when Angola was pressured to accept a lower production quota due to its declining capacity. The country was given five months to prove higher production capacity with assessments by two external consultancies. Like other African members like Nigeria and the Republic of Congo, Angola has consistently missed its production targets in recent years due to underinvestment, lack of exploration, and technical challenges, with production peaking at 1.9 million b/d in 2010. Despite this, Angola reacted angrily to the November quota cut, arguing that a lower target would hinder essential investment in its oil sector, which is crucial for government revenue.
Angola’s exit impacts the oil market. Following Angola’s departure, Brent crude fell 1.49% to $78.49 a barrel, and US West Texas Intermediate dropped 1.44% to $73.15 a barrel. OPEC+ had already lowered Angola’s 2024 oil production target to 1.11 million b/d after initially agreeing in June to a target of 1.28 million b/d, pending consultancy assessments. According to Bloomberg, Angola protested the decision, and disagreements over Africa’s oil output were cited as reasons for the delay of the OPEC+ meeting in late November 2023.
The meeting eventually took place on November 30, at which point OPEC set Nigeria’s 2024 oil production quota at 1.5 million bpd and Angola’s at 1.11 million bpd. The meeting also welcomed Brazil’s Minister of Mines and Energy, Alexandre Silveira de Oliveira, in anticipation of Brazil joining the OPEC+ cooperation charter in January 2024.
Flavio Inocencio, an energy expert from Angola, told OILMAN Magazine that Angola’s withdrawal from OPEC is unlikely to have immediate economic impacts as no sanctions or penalties are involved. For OPEC, the decision is somewhat because Angola, with an average production of 1.1 million bpd, is no longer bound by the group’s decisions. However, this will not affect global oil prices since the market produces about 102 million bpd, and other OPEC and non-OPEC producers can quickly compensate for Angola’s output.
“I don’t expect this decision to affect oil prices,” Inocencio said. “Other producers, like Saudi Arabia and the UAE, have spare capacity and can easily increase supply if needed. Angola’s decision was driven by the desire to avoid the quota system and expand its oil production, which has declined since its peak of 2 million bpd in 2008. Discoveries could help Angola reverse this decline and potentially impact global prices, but I don’t foresee a significant effect.”
Inocencio added that Angola’s departure from OPEC is less dramatic than some might think. He pointed out that other countries, like Indonesia and Ecuador, have joined and left OPEC multiple times. Angola could rejoin in the future under different political circumstances.
He also noted that while Angola’s closer ties with the United States may have influenced the decision, the main reason was that Angola’s interests needed to be fully considered when production quotas were assigned.
“Angola has a plan for energy transition,” he said. “The country has a green energy mix, with 75% of its electricity coming from hydroelectric power, and is building more dams to increase access to electricity, which currently stands at 50%. Additionally, Angola’s national oil company has created a subsidiary for renewable energy and is investing in solar farms and a hydrogen strategy. However, Angola cannot replace its oil and gas exports in the short to medium term, as they account for 90% of its foreign income.”
Abdulwaheed Sofiullahi is a journalist and researcher who covers oil and gas, climate, and the environment.
