Angola announced it is leaving the Organization of the Petroleum Exporting Countries (OPEC) after being part of the oil cartel for 16 years, the state-owned Jornal de Angola reported Dec. 21, citing Mineral Resources Minister Diamantino Azevedo.

The decision comes after OPEC slashed Angola's oil production quota for 2024 during a meeting on Nov. 30. Angola's quota was cut to 1.11 million barrels per day, around 25% below its previous level of 1.48 million barrels per day.

Angola rejected the new lower quota, with the governor to OPEC Estevao Pedro stating the country did not plan to comply with it. This disagreement contributed to a delay in the wider OPEC+ meeting earlier this month.

Angola decided leaving OPEC was in its best interests. "We feel that at this moment Angola gains nothing by remaining in the organization and, in defence of its interests, it decided to leave," Azevedo told state broadcaster TPA.

Impact on OPEC and Oil Markets Seen as Limited

Angola's departure leaves OPEC with 12 members and is a blow to the group's unity. However, the impact on global oil supplies and prices is expected to be limited.

"There is no impact on supply forecasts as Angola is already producing at full capacity rather than limiting output due to OPEC+ quotas," said Richard Bronze, head of geopolitics at Energy Aspects.

Oil prices dipped around 1% after the announcement before recovering slightly. Brent crude was trading just under $79 per barrel on Dec. 21.

Angola's Oil Output Has Plummeted 40%

Angola's oil production has dropped sharply in recent years as its offshore fields mature and international oil companies cut back investment amid lower profits.

The country pumped over 1.8 million barrels per day as recently as 2015. But output has plunged around 40% over the last eight years, with Angola now producing around 1.14 million barrels per day.

The decline made Angola's initial 2024 quota of 1.48 million barrels per day seem unrealistic. The country protested after the November meeting slashed the quota even further to 1.11 million barrels per day.

Rather than accept cuts it could not meet, Angola decided leaving OPEC and pumping at capacity was its best option.

OPEC Tries to Boost Prices Amid Growth Concerns

OPEC and its allies known as OPEC+ have been trying to support oil prices through supply cuts amid fears of an economic slowdown sapping crude demand next year.

The group is aiming to balance the market after prices plunged below $80 per barrel in recent months from as high as $139 in March following Russia's invasion of Ukraine.

OPEC+ agreed to cut oil production targets by 2 million barrels per day from November through 2023, with Saudi Arabia and other Gulf countries shouldering the bulk of reductions.

While Angola's departure dents OPEC's image, it is unlikely to stop the group's efforts to manage supply and put a floor under plunging oil prices.