Editor’s Note: December 04, 2018
Africa is the big loser of OPEC’s decline
Qatar on Monday announced that it will leave the Organization of Petroleum Exporting Countries (OPEC) on January 1, 2019.
The move reflects growing discontent among the cartel’s 15 member countries, which has seen its influence on global oil prices wane in recent years.
Sharp increases in US oil production, and the rise of the Russia – Saudi alliance under the ‘Opec Plus’ output reduction deal means non-members are increasingly calling the shots.
Smaller members, like Qatar, are being sidelined – and the big loser is Africa.
Seven of OPEC’s 15 members are from the continent, with Republic of Congo becoming the latest to join in June.
While they account for a fraction of production – Saudi Arabia alone pumps more oil than Nigeria, Angola and Libya combined – this strength in numbers has raised hopes that the continent can exert more influence within OPEC, and by extension on oil prices.
This is obviously contingent on the organization retaining its clout, which is looking increasingly doubtful. It’s telling for example that non-member Russia unilaterally announced an extension to the output cut deal over the weekend, ahead of an OPEC meeting on Thursday.
Bad news for African producers, which already struggle for influence in global oil markets.
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