Angola Resisting Pressure to Taper Oil Output

Angola is resisting pressure by OPEC's de-facto leader Saudi Arabia for a steeper oil output cut to comply fully with record supply curbs, OPEC and industry sources said.

The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, have been cutting oil output since May by a record 9.7 million barrels per day after the coronavirus crisis destroyed a third of global demand.

After July, the cuts are due to taper to 7.7 million bpd until December.

Saudi Arabia has been pressing laggards such as Iraq, Kazakhstan, Nigeria and Angola to improve compliance with the cuts and compensate for May overproduction in July-September.

"Angola is saying they would not compensate for its overproduction in July-September like the rest of the countries but would be able to compensate only in October-December," said one OPEC source. "We are still trying to convince them."

Angola's Ministry of Mineral Resources and Petroleum and state oil company Sonangol did not respond to a Reuters request for comment.

In May, Angola pumped 1.28 million bpd, according to OPEC data, or 100,000 bpd more than its target. It trimmed production to 1.24 million bpd in June, based on a Reuters survey, 60,000 bpd above its target.

"Angola argues they did cut quickly despite the pain and difficulty it put them in with regard to long-term supply contracts," said one source familiar with Angolan oil plans.

The source said Sonangol will in August supply full volumes to buyers such as India's refiner MRPL and Indian Oil Corp. (IOC) as well as to Unipec, the trading arm of Chinese refiner Sinopec, and China's state-owned Sinochem. 

(Additional reporting by Noah Browning; editing by Jane Merriman)