Please ensure Javascript is enabled for purposes of website accessibility
Qatar Will Pull Out of OPEC Amid Tension With Saudi Arabia
By admin
Published 6 years ago on
December 3, 2018

Share

DUBAI, United Arab Emirates — The tiny, energy-rich Arab nation of Qatar announced Monday it will withdraw from OPEC in January, a rebuke of the Saudi-dominated cartel as the kingdom’s boycott of Doha continues unabated and a crucial meeting of the group looms this week.

“The Qatari leadership is no longer interested in remaining an active part of an organization that largely shuns it.”the Eurasia Group said in an analysis
The surprise declaration could make Qatar the first Middle East nation to leave the cartel since its founding in 1960. It again injects politics into an organization that long has insisted it is nonpartisan, stealing headlines just as the cartel deliberates production cuts to halt a slide in global crude oil prices.
Although contributing only a fraction of OPEC’s overall production, Qatar’s decision also throws into question the viability of the cartel. Once muscular enough to grind America to a halt with its 1970s oil embargo, OPEC needed non-members like Russia to push through a production cut in 2016 after prices crashed below $30 a barrel. That’s unlikely to change, especially as the United States regained the throne of the world’s top oil producer.
“The Qatari leadership is no longer interested in remaining an active part of an organization that largely shuns it,” the Eurasia Group said in an analysis. “The two individuals that markets focus on are Saudi Arabia’s energy tsar Khalid al-Falih and Russia’s Alexander Novak. Qatari energy officials are not consulted, at the very least not sufficiently, and its leaders are no longer an active part of the organization’s machine.”

Planning to Increase Its Exports

The decision was announced by Saad Sherida al-Kaabi, Qatar’s minister of state for energy affairs. He said Qatar, the world’s largest exporter of liquefied natural gas, planned to increase its exports from 77 million tons of gas per year to 110 million tons. He also said Qatar wants to raise its oil production.

“In light of such efforts and plans, and in our pursuit to strengthen Qatar’s position as a reliable and trustworthy energy supplier across the globe, we had to take steps to review Qatar’s role and contributions on the international energy scene.” — Saudi Arabia’s energy tsar Khalid al-Falih
“In light of such efforts and plans, and in our pursuit to strengthen Qatar’s position as a reliable and trustworthy energy supplier across the globe, we had to take steps to review Qatar’s role and contributions on the international energy scene,” al-Kaabi said.
There was no comment from Vienna-based OPEC, which meets Thursday to discuss possible production cuts. In November, al-Falih said OPEC and allied oil-producing countries will probably need to cut crude supplies, perhaps by as much as 1 million barrels of oil a day, to rebalance the market.
Qatar produces only about 600,000 barrels of crude oil a day, making it OPEC’s 11th biggest producer. The loss of production, under 2 percent of overall OPEC supply a day, won’t greatly affect the cartel’s position in the market.
Anas Alhajji, an oil analyst, said Qatar’s decision “has no impact on the market either way whether they’re in or they’re out.”

Years for Engineers to Discover the Field’s Vast Reserves

“The cost for them is higher than the benefit” of remaining in OPEC, Alhajji said. “This is just like shutting down a losing business.”

“This organization has become useless and adds nothing to us. They are used only for purposes that are detrimental to our national interest.”Sheikh Hamad bin Jassim Al Thani, Qatar’s former prime minister
Sheikh Hamad bin Jassim Al Thani, Qatar’s former prime minister who remains a powerful figure in the country, called the withdrawal from OPEC a “wise decision.”
“This organization has become useless and adds nothing to us,” Sheikh Hamad wrote on Twitter. “They are used only for purposes that are detrimental to our national interest.”
Qatar, a country of 2.6 million people where citizens make up over 10 percent of the population, discovered its offshore North Field gas deposit in 1971, the same year it became independent.
It took years for engineers to discover the field’s vast reserves, which shot Qatar to No. 3 in world rankings, behind Russia and Iran, with which it shares the North Field. It also has made the country fantastically wealthy, sparking its successful bid for the 2022 FIFA World Cup.

Larger Importance in International Affairs

Qatar also hosts the al-Udeid Air Base, the home of the forward headquarters of the U.S. military’s Central Command and about 10,000 U.S. troops.
Qatar’s wealth has seen it take on a larger importance in international affairs. Its political stances, often supporting Islamists, have drawn the ire of its neighbors, particularly Saudi Arabia, OPEC’s largest exporter.
In June 2017, Bahrain, Egypt, Saudi Arabia and the United Arab Emirates cut ties to Qatar in a political dispute that is still going on. They also launched an economic boycott, stopping Qatar Airways flights from using their airspace, closing the country’s sole land border with Saudi Arabia and blocking its ships from using their ports.
They say the crisis stems from Qatar’s support for extremist groups in the region, charges denied by Doha. The four nations also have pointed to Qatar’s close relationship with Iran. Qatar restored full diplomatic ties to Iran amid the dispute.
OPEC, or the Organization of the Petroleum Exporting Countries, was formed in 1960 as a reaction to Western domination of the oil industry.

First Nation Outside of Its Founding Members to Join

Qatar was the first nation outside of its founding members to join the cartel, entering its ranks in 1961. Counting Qatar, OPEC has 15 members, including Algeria, Angola, Congo, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates and Venezuela. OPEC nations like Ecuador, Gabon and Indonesia have either withdrawn or suspended their membership in the past, only later to rejoin. Qatar could potentially do the same.

President Donald Trump repeatedly has criticized both OPEC and U.S. ally Saudi Arabia over rising oil prices.
OPEC sets production targets for its members in an effort to control the price of oil available on the global market.
President Donald Trump repeatedly has criticized both OPEC and U.S. ally Saudi Arabia over rising oil prices in recent weeks, demanding a production increase to drive down U.S. gasoline prices. That rising supply, coupled with the Trump administration allowing many countries to continue to import Iranian oil despite his targeting of Tehran with sanctions, has seen global prices drop.
Benchmark Brent crude, for instance, reached over $85 a barrel in early October, only to drop sharply in the time since. It traded at just over $61 a barrel Monday.

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

One Man Dead After Kings River Rescue Attempt in Fresno County

DON'T MISS

Oil Falls on Signs of Progress in US-Iran Talks Amid More Market Stress

DON'T MISS

US Bond Funds Suffer Fifth Weekly Outflow on Tariff-Driven Inflation Fears

DON'T MISS

Trump Warns of Economic Slowdown Unless Fed Cuts Rates

DON'T MISS

Fresno County Will Sell Naming Rights for Clovis and Reedley Libraries

DON'T MISS

Steph Curry Scores 31 Points in the Warriors’ Victory Over the Rockets in Game 1

DON'T MISS

Pope Francis, First Latin American Pontiff, Dies on Easter Monday

DON'T MISS

Chargers in Need of Help at Wide Receiver and Tight End in the NFL Draft

DON'T MISS

Magic Happens When Kids and Adults Learn to Swim. Tragedy Can Strike if They Don’t.

DON'T MISS

Big Fresno Fair Board Will Be Led by an American Sikh for 1st Time

UP NEXT

Chargers in Need of Help at Wide Receiver and Tight End in the NFL Draft

UP NEXT

Magic Happens When Kids and Adults Learn to Swim. Tragedy Can Strike if They Don’t.

UP NEXT

Yemen’s Houthi Rebels Report US Strikes in the Capital and a Coastal City

UP NEXT

Humanoid Robots Run a Chinese Half-Marathon Alongside Human Competitors

UP NEXT

Anti-Trump Protesters Turn Out to Rallies Across Country

UP NEXT

250 Years After America Went to War for Independence, a Divided Nation Battles Over Its Legacy

UP NEXT

Greg Cronin Fired as Coach of Anaheim Ducks After 2 Seasons

UP NEXT

Israeli Strikes on Gaza Kill More Than 90 People in 48 Hours, Palestinians Say

UP NEXT

US and Iran Advance Nuclear Talks to Expert Level After Rome Meeting

UP NEXT

Putin Announces an Easter Ceasefire as Russia and Ukraine Swap Hundreds of POWs

Trump Warns of Economic Slowdown Unless Fed Cuts Rates

25 minutes ago

Fresno County Will Sell Naming Rights for Clovis and Reedley Libraries

27 minutes ago

Steph Curry Scores 31 Points in the Warriors’ Victory Over the Rockets in Game 1

32 minutes ago

Pope Francis, First Latin American Pontiff, Dies on Easter Monday

2 hours ago

Chargers in Need of Help at Wide Receiver and Tight End in the NFL Draft

24 hours ago

Magic Happens When Kids and Adults Learn to Swim. Tragedy Can Strike if They Don’t.

1 day ago

Big Fresno Fair Board Will Be Led by an American Sikh for 1st Time

1 day ago

AI ‘Friend’ for Public School Students Falls Flat

1 day ago

Is a ‘Friend-Apist’ What We Really Want From Therapy?

1 day ago

Yemen’s Houthi Rebels Report US Strikes in the Capital and a Coastal City

2 days ago

One Man Dead After Kings River Rescue Attempt in Fresno County

One man died and another was hospitalized Sunday after they were pulled from the Kings River near Winton Park, according to the Fresno Count...

14 minutes ago

14 minutes ago

One Man Dead After Kings River Rescue Attempt in Fresno County

The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. (REUTERS/Angus Mordant/File Photo)
15 minutes ago

Oil Falls on Signs of Progress in US-Iran Talks Amid More Market Stress

Wall Street street sign
19 minutes ago

US Bond Funds Suffer Fifth Weekly Outflow on Tariff-Driven Inflation Fears

President Donald Trump listens to remarks during a swearing-in ceremony for Administrator of the Centers for Medicare and Medicaid Services Mehmet Oz in the Oval Office in Washington, D.C., U.S., April 18, 2025. (REUTERS/Nathan Howard/File Photo)
25 minutes ago

Trump Warns of Economic Slowdown Unless Fed Cuts Rates

27 minutes ago

Fresno County Will Sell Naming Rights for Clovis and Reedley Libraries

Golden State Warriors' Stephen Curry (30) scores against Houston Rockets' Tari Eason (17) and Jalen Green (4) during the first half of Game 1 of an NBA basketball first-round playoff series in Houston, Sunday, April 20, 2025. (Scott Strazzante/San Francisco Chronicle via AP)
32 minutes ago

Steph Curry Scores 31 Points in the Warriors’ Victory Over the Rockets in Game 1

FILE PHOTO: Newly elected Pope Francis appears at the window of his future private apartment to bless the faithful, gathered below in St. Peter's Square, during the Sunday Angelus prayer at the Vatican March 17, 2013. REUTERS/Tony Gentile/File Photo
2 hours ago

Pope Francis, First Latin American Pontiff, Dies on Easter Monday

24 hours ago

Chargers in Need of Help at Wide Receiver and Tight End in the NFL Draft

Help continue the work that gets you the news that matters most.

Search

Send this to a friend