OPEC drops to 12 members over Angola exit, as cartel’s global market share depletes

Membership of the international crude oil cartel, the Organisation of the Petroleum Exporting Countries (OPEC) has now dropped to 12 members following last Fridays’ decision by the Southern African nation of Angola to leave the group.

Angola, last Friday served notice of its decision to exit the OPEC group with effect from January 1, 2024, following in the footsteps of other countries like Ecuador in 2020 and Qatar in 2019.

The country’s departure from OPEC will leave with it a crude oil production of about 27 million bpd, some 27 per cent of the 102 million bpd world oil market, which further reduces OPEC’s share of the world market which stood at 34 per cent in 2010.

As well as the departure of some members, OPEC and OPEC+ decisions to cut production and rising output of non-OPEC countries including the United States have weighed on its market share.

In recent years, Angola has been unable to meet its OPEC+ output quota because of declining investment.

For 2024, OPEC+ lowered Angola’s oil output target at a meeting last month to 1.11 million bpd.

This followed a review by outside analysts to verify production figures for Nigeria, Angola and Congo.

Angola, which had sought a quota of 1.18 million bpd, did not agree with this and sent a note of protest to OPEC.

Angola would join other nations with relatively small oil output that have left in recent years.

Qatar in 2019 quit OPEC to focus on gas, which some analysts interpreted as a swipe at Saudi Arabia, the oil exporting group’s de facto leader.

Some small producers have also joined OPEC in recent years. Equatorial Guinea became a full member in 2017 and Gabon re-joined in 2016. Congo became a full member in 2018.

It would be recalled that Angola, Friday, announced its exit from OPEC following series of disagreement over production cap placed on it by the group, this year.

Angola’s oil minister, Diamantino de Azevedo, who disclosed this, Friday, said the country ‘does not gain anything by remaining in the organisation.’

Angola joined OPEC in 2007.

Disagreements over lower oil quotas for some African countries, including Angola, led to a usual daylong delay to OPEC’s November meeting, where the group, along with allied producers led by Russia, decide how much oil to send to the world.

At the meeting, Angola’s production level was dropped to 1.11 million barrels per month after an assessment by the three independent sources, the organization said.

OPEC, led by Saudi Arabia, has been trying to bolster oil prices that have fallen in recent months over concerns about too much crude circulating in a weakening global economy, which could weigh on the thirst for oil for travel and industry.

The lower prices have been a good thing for U.S. drivers, who have been able to fill their gas tanks for less money in recent months but have hurt the bottom line of OPEC oil producers.

The price of U.S. benchmark crude has fallen 8% this year.

Oil prices have gotten a boost in recent days as Yemen’s Houthi rebels have escalated attacks on ships in the Red Sea and companies have diverted vessels from traveling through the area, where huge amounts of the world’s energy supplies transit between the Middle East, Asia and Europe.

While losing Angola, OPEC announced at its meeting last month that it was bringing Brazil into the fold, a major oil producer that has been producing record amounts of crude this year, according to the International Energy Agency.

Angola, which joined OPEC in 2007, produces about 1.1 million barrels per day, compared with 28 million bpd for the whole group.

OPEC was founded in 1960 by Saudi Arabia, Kuwait, Venezuela, Iran and Iraq.

Angola joined the group in 2007, since 2017, OPEC has worked with Russia and other non-members as part of the OPEC+ group to manage the market, in whose agreements Angola participated.