The gas-rich nation of Qatar on Monday said it is withdrawing from OPEC at the start of next year.
The head of the country’s energy ministry said it plans to focus its energy investments on further developing its natural gas resources.
“Achieving our ambitious growth strategy will undoubtedly require focused efforts, commitment and dedication to maintain and strengthen Qatar’s position as the leading natural gas producer,” Saad Sherida al-Kaabi said at a press conference in Doha, according to excerpts shared on Twitter by the state oil and gas company, Qatar Petroleum.
OPEC is the first Middle East country to withdraw from the cartel since it was formed in 1960. The move comes as Saudi Arabia was expected to announce production cuts when OPEC meets in Vienna this week in a bid to shore up prices.
However, the decision may more reflect a desire to irritate the kingdom than to protest the anticipated production cuts. Qatar remains under diplomatic and economic embargo by OPEC members Saudi Arabia and the United Arab Emirates, as well as other nations, which have accused Qatar of supporting terrorism and – perhaps more importantly to Saudi Arabia – aligning too closely with the kingdom’s rival, Iran.
Qatar’s oil production at the same time pales in comparison to its natural gas output – which is not regulated by OPEC. Qatar produces close to a third of global supply. Its oil production is much smaller, generating about 600,000 of the 33 million barrels that OPEC’s 15 members produce each day. Saudi Arabia, the cartel’s leading member, alone produces about 10.7 million barrels per day.
Hence, Qatar’s withdrawal is unlikely to have a major effect on oil markets. But it may still come as “a disappointment for OPEC because they’ve been trying to attract members,” Robin Mills, CEO of Qamar Energy, a consulting firm based in Dubai, told CNN
Indonesia in 2016 was the last country to depart OPEC. It had previously withdrawn from the cartel in 2009.