Qatar, one of the smallest oil producers but the world’s biggest liquefied natural gas (LNG) exporter will quit the Organization of the Petroleum Exporting Countries (OPEC) after fifty-seven years of membership to focus on petroleum gas. There are fifteen members of OPEC, with Saudi Arabia as de facto leader of the oil exporting group.
Qatar is at odds with Saudi Arabia and the United Arab Emirates (U.A.E.) and said its decision to leave OPEC in January was not driven by politics and though they did not name Saudi Arabia, the Minister of State for Energy Affairs Saad al-Kaabi said, “We are not saying we are going to get out of the oil business, but it is controlled by an organization managed by a country.”
Qatar will attend an OPEC meeting scheduled for Thursday and Friday this week in Vienna and will abide by its commitments, as the country focuses on its gas potential, Minister al-Kaabi said. This was because it was not practical “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 added.
Qatar’s former prime minister, Sheikh Hamad bin Jassim al-Thani, said on Twitter that OPEC “is only used for purposes that hurt our national interests”. Once close partners with Saudi Arabia and the U.A.E. on trade and security, Qatar has struck many new trade deals with other countries while investing heavily to scale up local food production and ramp up military power.
OPEC’s loss of a long-standing member undermines a bid to show a united front before the Vienna meeting, which is expected to back a supply cut to shore up prices. “They are not a big producer but have played a big part in (OPEC’s) history,” one OPEC source said of Qatar.
The exit highlights the growing dominance over policy making in the oil market of Saudi Arabia, Russia, and the United States, the world’s top three oil producers which together account for more than a third of global output. Riyadh and Moscow have been increasingly deciding output policies together, under pressure from American President Donald Trump on OPEC to bring down prices.
“It could signal a historic turning point of the organization towards Russia, Saudi Arabia and the United States,” said Algeria’s former energy minister and OPEC Chairman, Chakib Khelil, commenting on Qatar’s decision. He said Qatar’s exit would have a “psychological impact” because of the discord with Saudi Arabia and could prove “an example to be followed by other members in the wake of unilateral decisions of Saudi Arabia in the recent past.”