Qatar will be withdrawing from the Organisation of the Petroleum Exporting Countries (OPEC) in January 2019, its energy minister has announced. Qatar is one of the 15 member countries of the international cartel of oil exporting nations. On Monday the country’s energy minister Saad al-Kaabi told a news conference that “Qatar has decided to withdraw its membership form OPEC effective January 2019 and this decision was communicated to OPEC this morning.”
The minister said that the decision to pull out of OPEC was not easy as Qatar has been a member of the organisation for 57 years, but added that the countries impact on decisions made by OPEC was small. The country will be withdrawing from the organisation effective from 1 January 2019.
Qatar announces it was withdrawing from the Organization of Petroleum Exporting Countries “OPEC” effective 1 January 2019.
— Qatar Petroleum (@qatarpetroleum) December 3, 2018
The minister said that Qatar intends to focus its efforts on developing its natural gas industry. He added that the decision represents a technical and strategic change, and it is not politically motivated. He also said that the decision was not linked to economic boycott imposed on the country by Saudi Arab and three other Arab nations. In 2017, Saudi Arab, UAE, Bahrain and Egypt had imposed an economic boycott against Qatar.
Qatar is one of the smallest producers of oil in the OPEC nations, with less than 2% share in the total OPEC production. But it is the world’s largest exporter of liquefied natural gas (LNG), and the nation wants to concentrate on LNG. The energy minister said that Qatar will be increasing its natural gas production to 110 million tons from current 77 million tons per year. He said, “Qatar has worked diligently during the past few years to develop a future strategy based on growth and expansion, both in its activities at home and abroad”.
To maintain international crude prices as a desirable level, OPEC imposes production quota on its member countries. This ensures that there is no excess supply of oil in the market which can drive down the prices. Although OPEC claims it acts as a modest force for market stabilisation, and not as an anti-competitive cartel.
Other OPEC members have exited the group in past, but Qatar is the first Gulf nation to do so. This comes ahead of OPEC meeting in Vienna on December 6. OPEC and its allies including Russia will discuss cutting supplies in the meeting to stop the ongoing drop in crude prices.