OPEC Makes Light of Qatar’s Decision to Quit Group

OPEC Makes Light of Qatar’s Decision to Quit Group

Tuesday, 4 December, 2018 - 08:45
Observers said that Qatar's decision to quit OPEC will have little impact on the group. (Getty Images)
Al-Dammam – Asharq Al-Awsat
OPEC made light on Monday of Qatar’s decision to quit the oil exporting group in January 2019.

Despite Doha’s claims that it was withdrawing from the group to focus on its gas sector, officials said that it was a political decision aimed at driving wedge among OPEC members before their next meeting.

Asked if Qatar’s withdrawal would complicate OPEC’s decision on output this week, a non-Gulf OPEC source said: “Not really, even if it’s a regrettable and sad decision.”

The United Arab Emirates said Doha’s decision was a reflection of its declining influence.

“The political aspect of Qatar’s decision to quit OPEC is an admission of the decline of its role and influence in light of its political isolation,” Anwar Gargash, UAE minister of state for foreign affairs, said on Twitter.

Minister of State for Energy Affairs Saad al-Kaabi told a news conference that Doha’s decision “was communicated to OPEC” but said Qatar would attend the group’s meeting on Thursday and Friday, and would abide by its commitments, reported Reuters.

He said Doha would focus on its gas potential because it was not practical for Qatar “to put efforts and resources and time in an organization that we are a very small player in.”

Al-Kaabi stressed the decision was not political but related to the country’s long-term strategy and plans to develop its gas industry.

Qatar had been a member of OPEC for 57 years.

In September, Qatar announced it plans to boost gas production to 110 million tons per year by 2024.

Despite Qatar's announcement, oil prices soared on Monday after Russia and Saudi Arabia renewed a pact to cap output on the sidelines of a G20 summit.

While there was no announcement on how much would be cut and for how long, the pact was cheered by oil traders, with Brent jumping $2.60 to $62.06 and West Texas Intermediate up $2.42 to $53.35.

Although Qatar's sudden move came out of the blue, analysts say it will have limited impact on the global market.

Amrita Sen, chief oil analyst for Energy Aspects consultants, argued the move would have limited impact.

"Its oil production has been steady with limited prospects for increases."

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