What's behind Qatar pulling out of the Saudi-dominated OPEC cartel?
Qatar's oil minister Saad al-Kaabi announced the surprise decision on Monday at a Doha press conference.
"Qatar has decided to withdraw its membership from OPEC effective January 2019 and this decision was communicated to OPEC this morning," he said.
Kaabi, who also heads state-owned Qatar Petroleum, denied the move was linked to the ongoing blockade of the peninsula by a Saudi Arabia-led bloc.
The decision was "technical and strategic" and had "nothing to do with the blockade", he said.
Qatar's former prime minister, Hamad bin Jassem bin Jaber al-Thani, later praised the decision, branding it a "wise move", saying OPEC had become "useless" to Qatar.
"The withdrawal of the State of Qatar from OPEC is a wise decision. This organisation has become useless and adds nothing to us. They are useful only in purposes that are detrimental to our national interest," he tweeted.
The withdrawal was celebrated by Iranian officials, with Iran's ambassador to the UK hailing it as a move that would weaken Saudi Arabia and its hold on non-OPEC members.
"Qatar's Energy Minister announced that the country gets out of OPEC next month. Saudi Arabia has long been a policy of comprehensive sanctions and neighbours against Qatar continued," Hamid Baeidinejad said.
"The Saudi effort to impose their policies against non-OPEC countries and increase the role of Russia as well as the efficiency of the organisation has been weakened," his statement added.
'Not the end of the world'
Spencer Welch is director of the Oil Markets and Downstream team at IHS Markit. Doha's move would not greatly affect Saudi Arabia, he told The New Arab. Qatar was possibly making a political statement, he said.
"Relations with Saudi are strained, and they probably don't want to be told they have to cut oil production. By dropping out they can potentially get the benefit of OPEC without having to cut production," he said.
Despite the move being unexpected, Welch added its implications were not as ground-shaking as may have first been thought.
"This is interesting but not hugely significant; Qatar's oil production is a small part of OPEC, [and] they see little value in continuing to be part of the organisation," he said.
"Ultimately, Qatar's focus is gas production, much more than oil."
The move, according to Welch, is unlikely to inspire a domino effect among other OPEC members: "OPEC is stronger now than [it has been] for a while, with the alliance with Russia and other non-OPEC countries, plus other African countries keen to join OPEC."
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Qatar's decision is probably a sign of rising discontent among the smaller OPEC nations of being marginalised | ![]() |
Commodity analyst Giovanni Staunovo agreed Qatar was sending a message to OPEC to show the cartel's perceived weakness ahead of global meetings.
"Qatar's decision is probably a sign of rising discontent among the smaller OPEC nations of being marginalised. In a global context and within OPEC, Qatar is a small producer," he told The New Arab.
Qatar's crude production stands at around 600,000 barrels per day, while OPEC produces around 33 million barrels each day, of a global production of around 100 million barrels per day.
"From a sentiment perspective it is an unfortunate decision a few days ahead of the OPEC+ meetings, considering that the group likely wanted to send a message of a united group. I still expect OPEC+ to announce a production cut this week," Staunovo added.
Moody's Analytics have also downplayed the effect of Qatar's move on OPEC, saying the oil cartel's decisions will still affect Doha.
"We do not expect Qatar's decision to leave OPEC to have any credit implications for the sovereign. Qatar's reliance on natural gas means that OPEC's decisions on oil supply and their implications for oil prices will continue to have an indirect impact on Qatar's government and export revenue," said Alexander Perjessy, Vice-President and Senior Analyst at Moody's.
"For Qatar to no longer be part of these decisions will not change the sensitivity of its credit metrics to oil price fluctuations."
While analysts are not necessarily concerned about the wider implications of Doha's move, they are taking Qatar's statement that it wants to focus on gas production at face value, while viewing the move as a political statement of independence from Saudi Arabia.
Follow Diana Alghoul on Twitter: @SuperKnafeh