Angola slams the door of OPEC, in disagreement over production quotas

2023-12-21 15:20:00

Like Ecuador in January 2020, Angola is leaving the Organization of the Petroleum Exporting Countries (OPEC). This decision was taken following the holding of a Council of Ministers, held this Thursday, at the presidential palace in Luanda. It was transformed the same day into a decree with the force of law, signed by President João Lourenço.

“At present, Angola gains nothing by remaining in the organization and, to defend its interests, it has decided to leave it. When we see that we are in organizations and that our contributions, our ideas, have no effect, it is better to leave. We joined voluntarily in 2006 and we have decided to leave now, also voluntarily. And this is not a rash or ill-advised decision,” explained the Minister of Natural Resources, Oil and Gas, Diamantino de Azevedo.

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A decline that does not pass

This announcement comes following OPEC’s decision, at the end of November, to slash oil production for 2024. Objective, to halt the recent fall in prices. Thus, Angola was allocated a quota of 1.11 million barrels/day (bpd). However, the country was instead aiming for a target of 1.18 million bpd. Furthermore, it had already not hesitated to show its discontent, just like Nigeria, both being the oil heavyweights of the African continent.

“If we were to stay in OPEC, we would suffer the consequences of the decision to respect production quotas,” the indiqué Diamantino de Azevedo.

Namely that Angola would then be “forced to reduce its production which goes once morest our policy of avoiding any reduction and respecting contracts”, he added.

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For the minister, Angola has “always done [son] duty ” within this organization, founded in 1960, which brings together 13 members under the leadership of Ryad. Angola has been very active, “ but our role within the organization no longer seems relevant to us at present “, did he declare.

“The current results do not serve our interests” et « the time has come for our country to focus more on its goals,” he justified.

New tumble on the stock market

After this announcement, the price of oil increased its losses this Thursday. Around 1:15 p.m. GMT (2:15 p.m. in Paris), the price of a barrel of Brent, in the North Sea, for delivery in February fell 1.59%, to $78.43. Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery during the same period, lost 1.68%, to $72.97.

The fact remains that prices have been weighed down for several months. Despite the cuts announced at the end of November, crude prices remain stuck at their lowest since June (between 70 and 80 dollars per barrel), although they are above the average of the last five years. Which signals, according to some analysts, the fear of a “global recession” next year, says Russ Mold of AJ Bell, which would crush demand for black gold.

Oil: why prices are falling

The latest drop in oil prices can also be attributed “to record hydrocarbon production in the United States, thanks mainly to a resurgence in production from its shale fields” in several states, add DNB analysts. According to the US Energy Information Administration (EIA), during the week ended December 15, crude oil inventories increased by 2.9 million barrels. However, analysts predicted a drop of almost as much. Gasoline stocks also rose by 2.7 million barrels, much more than the expected increase of 1.35 million. According to the Energy Information Administration, U.S. oil production reached a record 13.2 million barrels per day, nine million of which came from shale.

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Added to this is “the continued escalation of geopolitical risk in the Middle East”, note DNB analysts. On Wednesday, the leader of the Yemeni rebels, Abdel Malik al-Houthi, threatened to retaliate in the event of an American strike once morest Yemen, following Washington’s announcement of the formation in the Red Sea of ​​a coalition to face the attacks rebels once morest ships. As well as new restrictions on the price of Russian oil.

(With AFP)