Qatar Petroleum has announced it will be leaving the oil cartel on January 1, 2019. The country’s state oil company revealed this in a series of tweets on Monday.
‘The withdrawal decision reflects Qatar’s desire to focus its efforts on plans to develop and increase its natural gas production,’ Saad Sherida Al-Kaabi, the country’s minister of state for energy affairs, was cited as saying in one of the tweets.
The small gas-rich state is the world’s leading exporter of liquified natural gas, accounting for about 30% of global demand.
Earlier in the year, Qatar was engaged in an economic turmoil with OPEC’s de facto leader, Saudi Arabia. In response, Qatar increased its gas production, the mainstay of its economy, last year.
Qatar is the first Middle Eastern country to leave OPEC. Though a long-term member, it’s contribution is not as significant as that of heavyweights Saudi Arabia and Iraq. It produces about 600,000 barrels a day of the almost 25 million barrels per day from all OPEC members.
‘Qatar is a fairly small producer … it was not making very much so it’s not that significant in itself,’ said Robin Mills, CEO of Qamar Energy, a consultancy firm based in Dubai. “But it’s a disappointment for OPEC because they’ve been trying to attract members.”
OPEC has been expanding in Africa, with Congo and Equatorial Guinea joining recently. ‘If you add those up, [the production] is equal to Qatar’s so it’s kind of lost the equivalent [output] of those new members,’ Mills added.
OPEC members collectively supply about 44% of the world’s crude oil. The cartel aims to monitor the market and decide to raise or lower oil production in order to maintain stable prices and supply.
Qatar has been a member of OPEC since 1961. It said the organization was aware of its decision to withdraw.
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