Increased crude exports have sparked hope for Angola following plunging oil commodity prices since 2014 which left several African economies in recession.
The country’s preliminary loading programme for July suggests a rise compared to June, and high prices are expected due to global tightness in physical markets and a broad gap in heavier grades of oil products. Asia remains a big market for Angola’s oil, and most traders believe China has few alternatives for Angola’s heavier oil grades, which are scarce in the global market because of U.S. sanctions on Iran and Venezuela.
Angola is the second largest oil producer in Africa.
According to Sergio Pugliese, the new head for Angola of the African Energy Chamber, “Angola is back. Plunging commodity prices since 2014 left most of Africa’s biggest economies in recession, highlighting the need to speed up economic diversification efforts. These do not mean transitioning away from oil but call for a better allocation of our resources and also increased participation of countries like Angola in the oil and gas value chain,” he said.
The importance and depth of reforms Angola has done since 2017 is far-reaching and is expected to have implications for decades to come.
One major reform is the creation of an independent Petroleum and Gas Agency. The agency is in charge of regulating the industry and implementing government policy.
“In addition, developing gas is also a strategic diversification move given that monetisation projects such as power generation, fertilisers and ammonia or petrochemicals are major contributors to economic growth and cannot be underestimated.”
Pugliese however pointed out that the over-reliance of many African nations on extractive industries, especially oil, remains a major challenge.