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Facts for Prelims (FFP)
Source: Reuters
Context: Angola has decided to leave OPEC, a setback for the Saudi-led oil producer group.
Reason:
Angola argues that OPEC no longer serves its interests, following a dispute over its output quota. Angola’s exit, joining Ecuador and Qatar as former members, further challenges OPEC’s market share, which has been decreasing due to production cuts and rising output from non-OPEC countries.
About OPEC:
It was established in 1960 at the Baghdad Conference by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela, is an intergovernmental organization with key members including Algeria, Equatorial Guinea, Gabon, Libya, Nigeria, the Republic of the Congo, and the United Arab Emirates.
The organization’s primary objective is to coordinate and unify petroleum policies among member countries, ensuring fair and stable prices for petroleum producers and maintaining an efficient, economic, and regular supply of petroleum to consuming nations. With its headquarters in Vienna, Austria, OPEC holds significant global influence, possessing over 80% of the world’s total crude oil reserves.
OPEC+ represents approximately 40% of world oil production, comprising OPEC and 10 other major oil-exporting nations, including Russia. The organization regulates crude oil prices through mechanisms like spot or future sales, using Brent Crude as a benchmark for quality, with WTI (West Texas Intermediate) being another major Benchmark.
About Angola
It is a country on the west-central coast of Southern Africa. Bordered by Namibia to the south, the Democratic Republic of the Congo to the north, Zambia to the east, and the Atlantic Ocean to the west. The capital and largest city of Angola is Luanda.
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