The decision comes after the producer group lowered Angola’s
oil output target last month as part of a series of cuts led by Saudi Arabia to
help prop up prices.
Brent, the international crude oil benchmark, fell 1.8 per
cent to $78.26 a barrel on Thursday while the US benchmark, West Texas
Intermediate, dropped 2.1 per cent to $72.69 a barrel.
Angola joined Opec in 2007 but has clashed with Saudi Arabia
at recent meetings over attempts to lower its production baseline — the level
from which each member’s output quota is calculated — to reflect declines in
the country’s production capacity.
Angola walked out of an Opec meeting in June, but eventually
agreed — along with Nigeria and the Republic of Congo — for its production
baseline to be reviewed by an independent third party. Following that review,
all three countries’ baselines for 2024 were lowered at the last Opec meeting
in November.
Helima Croft, a former CIA analyst and head of commodities
research at RBC Capital Markets, said Angola had never seemingly come to terms
with the June agreement, which allowed fellow Opec member the United Arab
Emirates to increase its baseline for 2024 while its own was cut.
“The seeds of this exit were laid in June,” she said. “In
addition, Angola has been one of the moodier members, having staged multiple
meeting walkouts in recent years at the secretariat.”
The departure is a blow to Opec but will not have a
significant impact on the group’s ability to influence the market. Angola’s
1.2mn barrels a day of production represents about 2 per cent of the total
output of the Opec+ alliance, which also includes Russia.
“Given the size of the country’s output, this exit will not
materially impact group operations,” Croft said.
Bjarne Schieldrop, chief commodities analyst at SEB,
cautioned against seeing Angola’s departure as a sign of a bigger problem with
the group.
“It will always be used by those who are bearish on oil as
an excuse to sell oil,” he said. “What really matters is Russia and Saudi
Arabia. This is not a signal that the rest of Opec is falling apart.”
Angola has been battling to turn around declining production
for nearly a decade. The decision, announced by oil minister Diamantino de
Azevedo was taken at a cabinet meeting and approved by President João Lourenço,
the state media agency reported on Thursday.
Alex Vines, head of the Africa programme at the Chatham
House think-tank, said Angola had pursued an increasingly “Ã la carte foreign
policy” under Lourenço, who became president in 2017, “and leaving Opec is part
of that”.
Although the country has historic links with the Soviet
Union, it has been more prepared to criticise Russia’s invasion of Ukraine than
other African countries. Luanda had become disgruntled with the direction taken
by Opec, usually set by Saudi Arabia and Russia, and the lack of attention paid
to the views of smaller producers such as itself, analysts said.
Ricardo Soares de Oliveira, an Oxford university professor
of African politics, said Angola had grown closer to the US under Lourenço,
though he did not see how leaving Opec would automatically serve Washington’s
interests.
President Joe Biden played host to Lourenço last month and
the US has committed to investing more than $1bn in the country, including
$900mn in a solar project aimed at helping accelerate its diversification away
from oil.
“There’s a very clear rapprochement between the US and
Angola. But you can be a pro-west, global south player and still stay in Opec,”
Oliveira said.
“Going all the way in a pro-western direction would be quite
atypical for African states that are threading the needle carefully, unless
they’ve struck some grand bargain with the Americans.”
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