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Why Are Countries Leaving OPEC – Free PDF Download

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Published On October 9th, 2019 Leave a comment

Table of Contents

THE ORGANIZATION OF THE PETROLEUM EXPORTING COUNTRIES

OPEC

OPEC’s combined rate of oil production represented 44 percent of the world’s total in 2016
On top of that OPEC has agreements with Russia (another major oil producer)

WHAT HAPPENED RECENTLY?

Ecuador, a South American country, announced to leave Organization of the Petroleum Exporting Countries (OPEC) in 2020.
The government of Ecuador decided to leave the 14-nation group due to financial problems in the country

FORMER MEMBERS

Indonesia and Qatar are former members.
Qatar left OPEC on 1 January 2019

ECUADOR

THE REASONS

Ecuador produces about 545,000 barrels per day (bpd) of crude, but is struggling with tight liquidity because of a wide fiscal deficit and hefty foreign debt.
It reached a $4.2 billion deal with the International Monetary Fund in February which allowed it to receive an immediate disbursement of $652 million and opened the door for an additional $6 billion in loans.
OPEC, Russia and other producers have since Jan. 1 implemented a deal to cut output by 1.2 million bpd.

WILL THIS IMPACT OPEC’S PLANS?

Ecuador joined OPEC in 1973, withdrew in 1992, then re-joined in 2007.
Other small former OPEC members have also left the organization for fiscal reasons. Indonesia suspended membership in 2016 as it sought to increase oil exports.