National Energy Security Fund expert Stanislav Mitrakhovich spoke about scenarios for the development of events after Angola’s withdrawal from OPEC.
“Back on November 30, when there was an OPEC+ meeting, Angola said that it was not going to adhere to the quotas that were prescribed to it,” said expert on air on Sputnik radio. “Therefore, there is no fundamental difference in the fact that it comes out for the physical oil market. Although, in case of panic, speculators may bear down – by a couple of dollars per barrel. The general situation is more important: if a country leaves OPEC+, it means there is no agreement, what if someone else wants to disobey the quotas or leave.”
Angola’s exit from OPEC, and, accordingly, from OPEC+, raises questions also for Russia, he believes.
“The question for Russia for the future is: how should we behave in this situation? Will we put up with the fact that more and more “free riders” are appearing who do not obey the general logic of OPEC+ actions, and will we continue to limit ourselves in order to maintain prices? Or are we ready for a full-fledged price war – every man for himself? I think a price war is the worst option. Experience has shown that it is bad for everyone (oil exporters) and it is better to negotiate. Therefore, I think that at the beginning of 2024 there will be a new OPEC+ meeting, at which, most likely, key countries will agree on new production restrictions,” predicts Stanislav Mitrakhovich.
The news is certainly alarming, says an expert from the Financial University under the Russian Government Igor Yushkov.
“This is an extremely negative example for other members of the organization. Angola could provoke their withdrawal from the OPEC+ deal. After all, it is understood that, having left OPEC, Angola will produce oil to the maximum, they say, it was prevented from increasing production volumes. If someone follows her example, then everything (both OPEC unity and the OPEC+ deal) will fall apart, there will be an oversupply of oil on the world market, and as a result, prices will most likely fall to $40 per barrel, and maybe lower “, the expert suggested.
Nigeria and Congo, which previously refused to agree on oil production quotas, may become followers. It is possible, Yushkov continued, that Angola is acting at someone’s suggestion.
“If we think about who would benefit from this at the moment, then first of all the United States. In the White House, it is the administration Biden has always insisted that the price of oil decrease. Moreover, in the States, 2024 is an election year. Democrats need support, which they currently lack; its level today is less than their expectations. If this is their doing, then they will be able to lower oil prices, provoke a crisis in OPEC, and also deprive Russia of part of its income,” argues Igor Yushkov.
Angola is leaving the Organization of Petroleum Exporting Countries, the Minister of Mineral Resources, Oil and Gas said. Diamantino Azevedo. The minister explained that the country is not satisfied with the current oil production quotas.
“Until now, quotas have not had an impact on us, but if we remained in OPEC, we would suffer the consequences of the decision to comply with production quotas,” he explained.
A number of OPEC+ countries at the end of November decided to extend voluntary production cuts until the end of the first quarter of next year. Saudi Arabia extended the reduction by a million barrels per day, Russia extended and increased the reduction in the export of oil and petroleum products to 500 thousand barrels. OPEC also reduced the quotas of several countries, including Angola, for next year. Luanda responded by saying that it did not agree with the new quota and planned to produce more than the required level.
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2023-12-21 19:51:00
