Oil prices abruptly fell earlier after Angola announced it was leaving OPEC.
"The decision, duly considered, was taken at a session of the Council of Ministers, guided by the President of the Republic, João Lourenço," Angola's oil minister said.
The fear is that this is a crack in the OPEC dam and the first step towards a breakup of the cartel, something that could release 4 million barrels per day of oil into the market and send prices into the $30s.
Angola is a decent-sized oil producer, at about 1.1 million barrels per day. However it's unclear why they picked such a big fight with OPEC as they have been unable to maintain production for years.
The tension started in June when Angola was given a downgrade in its output target for 2024 to 1.28mn b/d, down 175k b/d on its 2023 target. It was further cut at the latest meeting to 1.08 mbpd. Angola wanted 1.18 mbpd and evidently the dispute was enough for them to leave OPEC.
The potential for maybe another 50k bpd this year is immaterial to the global oil market but but the possibility of a further breakup is certainly higher now and that's why oil fell $1.50.
More recently, oil has bounced somewhat as traders digest the news.
