Last year, Angola overtook Nigeria as Africa’s largest oil producer, as the latter’s output fell due to militant attacks on its oil infrastructure, primarily pipelines. When OPEC agreed to cut production by 1.2 MMbbl/d to 32.5 MMbbl/d at least through the first half of the year, many questioned whether the group’s members that have been hardest hit by low oil prices would comply, as there’s no binding mechanism to ensure compliance. Earlier this week, however, Angola’s state-run Sonangol indicated that it has cut production per the Nov. 30 OPEC deal, despite the country’s oil dependent economy. And Angola isn’t the only OPEC member that as of this writing appears to be falling in line.
The company said it has reduced production by 78,000 bpd to 1.673 MMbbl/d, even as Angola saw economic growth slow to about 1% in 2016 because of a significant slowdown in its non-oil sector. Oil accounts for about 45% of Angola’s GDP and over 95% of its exports. In June 2016, the International Monetary Fund said in a report that the Angolan economy continues to be severely impacted by the oil price downturn of the last two-and-a-half years.
Iraq has also pledged as part of the OPEC deal to cut production between 200,000 to 210,000 bpd, despite the decrease in output occasioned by the country’s ongoing fight with ISIS.
And, according to a Wall Street Journal report, OPEC leader Saudi Arabia has already cut oil production by 486,000 bbl/d to 10.058 MMbbl/d. Kuwait, UAE, and Venezuela have also announced their proportional output cuts.