Asian markets eye upturn in oil output post Angola's OPEC exit: S&P Global

New Delhi: Amid Angola's departure from OPEC, Asian oil buyers are eyeing a significant surge in production, with output rebounding from a four-month low in February, said S&P Global Commodity Insights. Major importers such as China, South Korea, Thailand, and India anticipate heightened flexibility in sourcing as Angola ramps up its oil supply.

Kang Wu, global head of oil demand research at S&P Global Commodity Insights, emphasized the impact on Asian markets: "As the largest recipient of Angolan crudes, Asia will generally benefit from Angola's oil supply now as it will be free of restrictions since they are now outside of OPEC."

Angola, previously producing a record 1.9 million b/d of crude, saw output decline due to various factors. However, recent indicators point to a positive trend, with output surpassing a million barrels per day in March 2023 after a temporary dip, S&P Global Commodity Insights reported.

India's import dynamics have shifted notably, with a decline in West African imports attributed to increased Russian oil purchases. The share of West African crude imports in India dropped to 4% in 2023 from 13% in 2019, reflecting broader changes in the region's import patterns, according to Himi Srivastava, South Asia oil analyst at S&P Global Commodity Insights.

"There were two main reasons for crude imports dropping from Angola. First, there was an overall drop in West African imports due to a rise in the share of Russian barrels, and secondly declining production in Angola," Srivastava explained.

Angola's heavy crude remains in demand, particularly in China, which imported 1.1 million b/d of Angolan oil in March. With grades like Girassol, Cabinda, and Dalia finding buyers across Asia and Europe, Angola's increased production is poised to reshape supply dynamics in the global oil market, as highlighted by S&P Global Commodity Insights.