The consequences for Russia of Angola’s withdrawal from OPEC will be modest. None of the large, influential oil producers are expected to exit the alliance in the near term, which suggests oil prices will hold steady in the coming months. This assessment was shared with socialbites.ca by Mikhail Vasiliev, chief analyst at Sovcombank.
Which nations belong to OPEC and the broader OPEC+ framework?
OPEC, the Organization of the Petroleum Exporting Countries, was established in 1960 in Baghdad, Iraq. Following Angola’s departure, the OPEC coalition comprises 12 member states: Saudi Arabia, Iraq, Iran, Kuwait, Venezuela, Libya, the United Arab Emirates, Algeria, Nigeria, Gabon, Guinea, and the Congo. The OPEC+ alliance, formed in 2016, includes 10 partners: Russia, Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Sudan, and South Sudan.
Vasiliev noted that after Angola exits, the group will count 12 members. It is also worth recalling that Qatar, Indonesia, and Ecuador have left in recent years. In his view, Angola’s move does not significantly perturb the oil market. The country currently produces around 1.1 million barrels per day and lacks the capacity to meaningfully boost output to disrupt supply and demand on the global stage, he argued.
In this context, the analyst expects little change in the price of a barrel of Brent crude over the coming months, with quotas staying within roughly 73 to 83 dollars per barrel. For 2024, Vasiliev projected an average Brent price near 80 dollars. He therefore concluded that Angola’s exit from OPEC would have a limited impact on Russia.
Angola’s decision also sheds light on ongoing debates within the OPEC+ partnership. At the most recent OPEC+ gathering, held at the end of November, several African producers, including Angola, expressed dissatisfaction with the agreed production cuts set on November 30. Angola’s output stood around 1.11 million barrels per day, below the current level of production. When the alliance previously agreed to a 1.28 million barrel per day quota in June, Angola was unable to reach that level. Reuters reported that disagreements over quotas for African members contributed to a four-day delay in concluding the discussions among OPEC+ delegates.
Earlier remarks from analyst Koroev suggested that the market response to Angola’s withdrawal from OPEC remained moderate.