Speed Reads

oil

Qatar announces surprise plan to quit OPEC in January

On Monday, Qatar unexpectedly announced it will withdraw from OPEC in January to focus on developing its massive liquified natural gas (LNG) reserves and boosting oil production above approved quotas. OPEC's de facto leader, Saudi Arabia, cut ties with Qatar and led an ongoing economic boycott in June 2017, joined by Egypt, the United Arab Emirates, and Bahrain. But Qatari energy affairs minister Saad Sherida al-Kaabi said politics weren't behind the decision to quit OPEC, and he will attend the 15-member organization's meeting later this week. "For me, to put efforts and resources and time in an organization that we are a very small player in and I don't have a say in what happens," he said, "practically it does not work, so for us it's better to focus on our big growth potential."

Qatar produces only 600,000 barrels a day (bpd) of oil, versus Saudi Arabia's 11 million bpd, so its departure and aspirations to increase crude output are expected to have little effect on sagging global oil prices; OPEC is expected to tighten production along with its allies. OPEC, or the Organization of the Petroleum Exporting Countries, was formed in 1960, and Qatar joined in 1961, the first nation to sign on outside of its founding members. It will become the first Mideast country to quit OPEC.