Angola welcomes oil price surge but warns rally may be temporary

(Bloomberg) – Angola’s government views the recent surge in oil prices as positive for Africa’s third-largest crude producer, while cautioning that the rally may prove temporary and could drive up import costs. 

With tanker traffic through the Strait of Hormuz largely halted, fears of supply disruptions have helped drive global oil prices higher. Map created by Global Energy Infrastructure.

Minister of State for Economic Coordination José de Lima Massano said on Friday that his administration is taking a “wait-and-see” approach even as crude trades well above the $61-a-barrel benchmark used in this year’s budget. Brent fetched more than $86 a barrel as the war in the Middle East entered its seventh day.

“In the immediate term, an upward adjustment in oil prices always brings positive news for producing countries,” Massano said at a conference in Lisbon hosted by business newspaper Jornal de Negocios. “In Angola’s case, however, the import bill for essential goods may feel the effects of the increase in oil prices.”

Angola has sought to diversify its economy beyond oil, though crude still accounts for more than 90% of export revenue. The country imports most of its goods, leaving it exposed to higher costs when global prices rise.

The minister reiterated the government’s plans to invest in farming, industrial projects and oil refineries in a bid to create jobs, reduce imports and bolster domestic production.

“We want an economy that is inclusive, where all sectors generate concrete opportunities,” he said. “We need more goods and services produced in Angola.”