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Posted On: 3 December 2018 12:43 pm
Updated On: 3 April 2019 12:58 pm

Qatar to quit OPEC as of January 2019

Khadiza Begum
Khadiza Begum
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Qatar is withdrawing from the Organization of the Petroleum Exporting Countries (OPEC) as of January 2019, Saad Sherida al-Kaabi, the country’s energy minister said on Monday (December 3, 2018) while speaking at a news conference in Doha.

As he said: “Qatar has decided to withdraw its membership from OPEC effective January 2019 and this decision was communicated to OPEC this morning.”

The Minister added that this decision was communicated to OPEC before the announcement. He stressed that Qatar will continue to abide by all commitments like any country outside the OPEC, but Qatar will not be committed to OPEC agreements after exiting.

Qatar has been in OPEC for 57 years!

OPEC
Image source: www.middleeastmonitor.com

OPEC is a permanent, intergovernmental Organization, created at the Baghdad Conference on September 10–14, 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Right after one year of the organisation's establishment, Qatar joined OPEC in 1961.

The stated mission of the organization is to coordinate and unify the petroleum policies of its member countries and ensure the stabilization of oil markets, in order to secure an efficient, economic and regular supply of petroleum to consumers. For years, OPEC has been regulating oil production in order to control global prices.

OPEC currently has 15 members — six in the Middle East, seven in Africa and two in South America. However, Qatar is the first Gulf country to leave OPEC.

What does it mean for Qatar to leave OPEC?

Qatar

Qatar is one of OPEC’s smallest producers and the world’s largest liquefied natural gas (LNG) exporter, producing almost 30 percent of the world's natural gas. It’s been a long journey for Qatar with OPEC, so what made Qatar to decide to quit the bloc of 15 oil-producing countries that account for almost half of the world's oil production?

The declaration was purely a business decision, as Al Jazeera reports quoting Al-Kaabi’s comments.

"We are a small player in OPEC, and I'm a businessman, it doesn't make sense for me to focus on things that our not our strength, and gas is our strength so that is why we've made this decision."

Qatar’s energy minister also stated that the decision was not easy as Qatar has been in OPEC for 57 years! He added that the withdrawal decision reflects Qatar’s intent to focus its efforts on developing its natural gas industry, as the country moves to increase LNG production from 77 million to 110 million tonnes annually.

"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," said al-Kaabi.

Al-Kaabi said the decision was not linked to a political and economic boycott of Qatar imposed since June 2017 by OPEC’s de facto leader Saudi Arabia and three other Arab states.

OPEC kingpin Saudi Arabia along with three other Arab states has cut diplomatic, trade and transport ties with Qatar Since June 2017 accusing the country of supporting terrorism and their regional rival, Iran. Qatar denies the claims, saying the boycott hampers its sovereignty.


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(Cover photo credit: REUTERS/Naseem Zeitoon)