Ecuador announced Wednesday it will leave the Organization of Petroleum Exporting Countries (OPEC) at the end of this year in order to increase their export revenue.
The Andean country has breached its output quota set by OPEC in every month of this year, producing an average of 545,000 barrels per day of crude. President Lenin Moreno is currently seeking to boost oil revenues to help reduce the country’s considerable fiscal deficit and foreign debt built up under his far-left predecessor Rafael Correa.
“Ecuador is being honest about not being able to subject itself to further cuts,” Schreiner Parker, vice president for Latin America at consultant Rystad Energy, told Bloomberg. “Moreno wants to pursue his own policies, and is more market-friendly than people originally thought.”
The reforms are intended to reverse Correa’s legacy of left-wing socialism, as Moreno is also seeking to renew ties with the International Monetary Fund and other multilateral lenders who have promised to provide Ecuador with $10.2 billion in loans until 2021.
It is not the first time that Ecuador has left the organization, which it first joined in 1973 before suspending its membership in 1992. Correa reapplied for membership in 2007. Other countries to have left in recent years include Qatar and Indonesia.
The decision leaves OPEC with 13 remaining members to help stabilize global oil markets. The cartel states their mission as helping to “coordinate and unify the petroleum policies of its member countries and ensure the stabilization of oil markets, in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry.”
President Donald Trump has been frank about his disdain for the OPEC cartel, accusing it last year of “ripping off the rest of the world” by setting high oil prices.
“OPEC and OPEC nations are, as usual, ripping off the rest of the world, and I don’t like it,” Trump said at last year’s U.N. General Assembly, adding that the U.S. defends many of the OPEC nations “for nothing, and then they take advantage of us by giving us high oil prices.