Angola’s oil output might be just a drop in the barrel for OPEC — a group of leading oil-producing countries — but its departure could ripple into much bigger changes.
What happened: Angola has left OPEC, declaring it “gains nothing” from staying in the cartel. The country hasn’t been shy about publicly fighting cuts imposed by the group to its production quotas.
- Despite more OPEC cuts looming in January, oil prices still dropped on Thursday over concerns of a lack of unity within the group.
Why it matters: Angola's exit sheds light on a possible rift inside OPEC around Saudi Arabia's leadership, namely its insistence on lowering oil outputs to keep prices high. If that rift grows, it could change the direction of a group that hugely influences what we pay for fuel.
- Other countries may share frustrations over Saudi Arabia ignoring complaints that keeping prices high for too long will lead to OPEC losing market share to the U.S.
What’s next: Angola was one of OPEC’s lower-producing members, but its oil has to be replaced by someone, and the UAE is the top candidate. If it does step up, it would become OPEC’s second-biggest producer and put it in the best position to pressure Saudi Arabia.
Big picture: Angola joins Indonesia, Qatar, and Ecuador in the ranks of countries that have left OPEC over the last seven years. Though several other countries have since joined, OPEC’s share of the global oil market is now at 27%, down from 34% in 2010.—JK