Qatar quits Opec ahead of gas surge
QATAR has quit its membership of the Organisation of Petroleum Exporting Countries (Opec) just days ahead of its oil market meeting this week after almost six decades within the cartel.
The gas-rich Gulf state said its attendance at the Opec meeting in Vienna this week will be its last as it prepares to assert its dominance in the global gas market.
The unexpected exit has raised fresh doubts over the future of the oil producers’ cartel, which in recent years has relied on aid from a Russian-led group of oil nations to bring the market to heel.
It is also deepens the rift between Qatar and Saudi Arabia, Opec’s de facto leader, after Saudi Arabia’s diplomatic crackdown on its neighbour last summer.
Riyadh and its allies plunged the peninsula state into crisis by imposing severe travel restrictions alongside economic sanctions, which threatened to isolate Qatar within the Middle East. Saad al-Kaabi, Qatar’s minister of state for energy affairs, denied that
Continued from Page 1 its departure from Opec is politically motivated, but still took a swipe at the Saudi-led oil bloc.
“We are not saying we are going to get out of the oil business, but it is controlled by an organisation managed by a country,” he said, without naming the country specifically. “It was purely a business decision for Qatar’s future strategy towards the energy sector.”
Qatar plans to flex its global energy market might through a series of major gas project deals to build on its position as one of the world’s most powerful natural gas players.
It holds the world’s largest reserves of gas, which is poised to become the world’s fastest growing source of energy as emerging economies turn their backs on coal.
Under the plans, Qatar will boost its production of liquefied natural gas, which is shipped to countries including the UK, from 4.8m barrels per day to 6.5m barrels, he said.
By contrast, Qatar produces less than 2pc of Opec’s oil output. As the 11th largest producer of the cartel’s 15 members, Qatar is unlikely to pose a threat to Opec strategy by growing production. However, the Qatari dissent threatens to stoke growing dissatisfaction among Opec nations over Saudi leadership, which could fracture support for oil production controls within the splintered group.
Ashley Kelty, of Cantor Fitzgerald, said many members are wary of how much influence Donald Trump has over Saudi Arabia, “and whether this leads to decisions that are not necessarily in the best interests of Opec”.
“The Saudis are certainly going to have to work harder to maintain agreement between the group on production cuts,” Mr Kelty said.
Opec+, which includes large oil producers such as Russia and Mexico, is expected to rein in oil exports to help shore up market prices after one of the steepest price falls since the 2015 market collapse. The price of Brent crude dropped to below $60 a barrel last week, from $85 in October, and climbed tentatively back to over $61 a barrel yesterday.
Saad al-Kaabi, Qatar’s energy minister, claims the move is not politically motivated