Doha ex­its OPEC to take a swipe at Riyadh

China Daily (Canada) - - VIEWS -

On Mon­day, Qatar an­nounced that it will leave the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries on Jan 1, end­ing its 57-year mem­ber­ship. What has prompted Doha to exit OPEC? And what im­pact will it have on the bloc and the oil mar­ket? Two ex­perts share their views on the is­sue with China Daily’s Liu Jianna. Ex­cerpts fol­low: largest ex­porter of liq­ue­fied nat­u­ral gas. The gas price, of course, is linked to the oil price. Be­ing tied to­gether with other oil pro­duc­ers, led by Saudi Ara­bia and Rus­sia, and thus be­ing forced to re­duce sup­ply is not con­ducive to Qatar’s eco­nomic growth.

In the long run, oil prices are ex­pected to dip fur­ther as Qatar may in­crease the sup­ply of oil and gas on a large scale while de­mands are ex­pected to re­main the same or de­cline. Which makes Qatar’s exit from OPEC dif­fer­ent from other geopo­lit­i­cal events that have largely driven up oil price.

Gen­er­ally speak­ing, the fu­ture of OPEC rests in the hands of ma­jor Gulf coun­tries and the US. Ac­tu­ally, Qatar’s exit has re­duced the pos­si­bil­ity of OPEC’s dis­in­te­gra­tion as Saudi Ara­bia will now have a greater say in the Qatar-less car­tel, to the US’ de­light.

Sun Xia, an as­so­ciate re­search fel­low at the In­sti­tute of In­ter­na­tional Re­la­tions, Shang­hai Academy of So­cial Sciences


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