OPEC nations affirm commitment to group after Angola’s exit over production dispute

(Bloomberg) – OPEC nations Iraq, Nigeria and the Republic of Congo affirmed their commitment to the oil-producer group following the exit of Angola last week.

“We reiterate our firm support for unity and cohesion at the heart of OPEC and OPEC+,” Congo’s Minister of Hydrocarbons, Bruno Jean-Richard Itoua, said in a statement. “Each member, whether African or not, plays an indispensable role in achieving our shared objectives and in maintaining the balance of the global oil market.”

Angola quit OPEC on Thursday after a dispute over its production quota, shrinking the group’s membership to 12 nations and spurring doubts over its future cohesion. OPEC and allies are once again curbing output to shore up oil prices, which have slumped almost 20% in three months.  

Analysts mostly viewed Luanda’s exit as an isolated case, a sign that a long-running decline in its production capabilities had rendered the country a less effective OPEC member. Traders expect fresh OPEC+ output cuts will still go into effect as planned next month.

Killing speculation. Other OPEC nations issued public statements over the weekend to forestall any speculation.

“We are resolute in our dedication to OPEC’s objectives while actively engaging with the organization to address concerns that resonate not only within our nation’s borders but across the continent,” Nigerian Minister of State for Petroleum, Heineken Lokpobiri, said in a statement on X, formerly known as Twitter.

Like Angola, Nigeria had a disagreement with OPEC’s leaders over its production quota for 2024, though this appeared to be resolved at the group’s latest meeting on Nov. 30.

Iraq, which will need to make some of the group’s biggest supply cuts next month to meet its new quota, confirmed its ongoing support.

OPEC is trying “to achieve the highest rates of balance between supply and demand to achieve stability in the global oil market,” Oil Ministry spokesman Assem Jihad told the Iraq News Agency. This should result in “a good level of revenue for the federal treasury” of Iraq.

Angola split from OPEC after 16 years of membership as it rejected a lower output target imposed by the group’s leaders to reflect the country’s diminished capacity. Many other OPEC members have been unable to join in supply curbs as they’ve already lost so much output to under-investment, political instability and sabotage.