Qatar has announced that it is withdrawing from the Organization of the Petroleum Exporting Countries (Opec) after 57 years of membership.
In a statement this morning, the oil-rich Middle East nation’s energy minister, Saad Sherida al-Kaabi, said: “Qatar has decided to withdraw its membership from Opec effective January 2019 and this decision was communicated to Opec this morning.”
The announcement comes just days before a conference of the 15-nation bloc of oil-rich countries. Al-Kaabi added that Qatar would still attend the meeting, in Vienna on Thursday and Friday, Reuters reports.
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Opec accounts for around 44% of global oil production and 81.5% of the world’s oil reserves, and is often referred to as a cartel, owing to the significant impact its policies have on global oil prices.
Qatar will be only the second country after Indonesia, and the first from the Middle East, to voluntarily leave Opec since its founding in 1960.
Robin Mills, CEO of Dubai-based consultancy firm Qamar Energy, said the decision will probably come as “a disappointment for Opec because they’ve been trying to attract members”, reports CNN.
Qatar is the world’s biggest exporter of liquified natural gas, and claims that the decision to leave Opec was driven by a desire to increase its natural gas production further, from 77 million tonnes to 110 million per year.
Al-Kaabi explained: “We don’t have great potential [in oil], we are very realistic. Our potential is gas.
“For me to put efforts and resources and time in an organisation that we are a very small player in and I don’t have a say in what happens ... practically it does not work, so for us it’s better to focus on our big growth potential.”
However, some commentators believe Qatar may be leaving the bloc for diplomatic reasons.
For the past two years, the country has been embroiled in a bitter diplomatic dispute with Opec’s largest producer, Saudi Arabia, and has been the subject of boycotts by some Arab neighbours over allegations that Doha funds terrorist activities in the Middle East.
Announcing the withdrawal, al-Kaabi acknowledged that “a lot of people will politicise it”, but insisted: “I assure you this purely was a decision on what’s right for Qatar long term. It’s a strategy decision.
“We will make a big splash in the oil and gas business soon.”
The BBC notes that Opec is expected this week to agree to extend oil production cuts to ensure that prices do not drop too much in the coming months.
But al-Kaabi confirmed in his statement that Qatar Petroleum plans to raise its production capability over the next decade, from 4.8 million barrels of oil per day to 6.5 million - a move at odds with Opec’s plans.
Vandana Hari, founder and chief executive of Vanda Insights, told The National: “The nature of the animal as far as Opec is concerned is the bigger production capacity you have then the more weight you carry.
“If you aren’t on board with a tough decision, like to reduce - and Qatar was never in that position since it is a relatively small producer - you have no sway”.
