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Qatar is pulling out of OPEC

Public Policy

OPEC is losing one of its oldest members.

The small, gas-rich state of Qatar said Monday that it will leave the oil cartel on January 1 after nearly 60 years. The country’s state oil company, Qatar Petroleum, made the announcement in a series of tweets.
“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 newly-appointed minister of state for energy affairs, was cited as saying in one of the tweets.
Qatar has been under a diplomatic and economic embargo by its Arab neighbors, including OPEC members Saudi Arabia and the United Arab Emirates, for the past 18 months. In response, Qatar has been increasing gas production, the mainstay of its economy.
OPEC has no role in the global market for natural gas. And Qatar made no reference to the dispute with other Gulf states in its announcement, emphasizing plans to cement its position as the world’s leading supplier of gas. Its exports currently account for about 30% of global demand.
“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,” Al-Kaabi said.
Qatar's newly appointed energy minister, Saad Sherida Al-Kaabi. He announced on Monday that Qatar will be withdrawing from OPEC in January.

Marginal OPEC producer

Qatar is a marginal player in OPEC when compared to some of the cartel’s biggest producers, such as Saudi Arabia and Iraq. It pumps about 600,000 barrels of oil a day out of more than 27 million from all OPEC members.
But the surprise move comes at a critical time for OPEC. Its members and other major producers are due to meet in Vienna this week to discuss cutting production to boost oil prices.
Concerns about oversupply have sent oil prices plunging. US crude futures hit a four-year high above $76 a barrel in early October. They are now trading at around $53 a barrel.
“The decision by Qatar to withdraw from OPEC does come as a surprise, but is unlikely to have a significant impact on the oil market,” Economist Intelligence Unit analyst Peter Kierna said.

A setback for OPEC

Qatar is the first Middle Eastern country to pull out of OPEC, which was founded in 1960. Other countries have come and gone — Indonesia left in 2009 before rejoining for less than a year in 2016. Gabon rejoined in 2016 after an absence of more than 20 years.
“It’s a disappointment for OPEC because they’ve been trying to attract members,” said Robin Mills, CEO of Qamar Energy, a consultancy firm based in Dubai.
OPEC has recently been expanding in Africa, with Congo and Equatorial Guinea signing up.
“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.
The 15 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.

19 Comments on "Qatar is pulling out of OPEC"

  1. Cloggie on Mon, 3rd Dec 2018 12:04 pm 

    Qatar is anticipating peak oil demand and doesn’t want to be restricted by OPEC. Everything needs to be sold before renewable energy takes over for ever.

  2. Cloggie on Mon, 3rd Dec 2018 1:18 pm 

    Dollar gets competition on world energy markets:

    “Here’s How Europe Plans to Challenge the Dollar’s Dominance”

  3. Davy on Mon, 3rd Dec 2018 1:29 pm 

    Did you see how short the article was neder. There is a reason for that. Nothing new to add to what is already a lame attempt at doing what they are not able to do and that is sport some balls.

  4. Antius on Mon, 3rd Dec 2018 1:37 pm 

    If there is a serious challenge to dollar hegemony, the Euro is the most likely candidate. But the EU is quite export dependant compared to the US, Germany most of all. I find it unlikely that there would be much enthusiasm for anything that would push up the value of the Euro.

    More likely, this move is an attempt to mitigate dollar tightening, which is removing liquidity from the global markets.

  5. george on Mon, 3rd Dec 2018 1:40 pm 

    Methinks the PRC has a hand in all of this.

  6. Cloggie on Mon, 3rd Dec 2018 2:07 pm 

    “Did you see how short the article was neder. There is a reason for that.“

    American source, perhaps? Five hours chewing on a pencil and still no thoughts?

    Just kidding.

    “Nothing new to add to what is already a lame attempt at doing what they are not able to do and that is sport some balls.”

    Penis-exhibitonism is hardly a motivating factor in choosing between currencies. Political goodwill, track record, trust and political opportunism are.

    Europe has a far better standing in countries like China, Russia, India, Iran, Japan, Canada than our over-assertive dollar cowboys.

    My personal recommendation for empire dave to get on in the world:

    Rule number one: please keep your pants on, nobody is interested in your balls.

  7. I AM THE MOB on Mon, 3rd Dec 2018 2:13 pm 

    There is no threat to the dollar..Its stronger than ever.

    Here is a chart of the IMF’s reserves


  8. Cloggie on Mon, 3rd Dec 2018 2:38 pm 

    South China Morning Post:

    “Why 2018 could be the year of the euro”

    Most indicative here is that there is a certain Chinese goodwill visavis Europe. They would love to see Europe stronger and America weaker… because they see the US as a threat.

  9. I AM THE MOB on Mon, 3rd Dec 2018 2:44 pm 

    Riots, looting and violence: Here’s what’s happening in France and why it matters

  10. I AM THE MOB on Mon, 3rd Dec 2018 2:53 pm 

    The European Spring has begun!

    France is falling!

  11. Cloggie on Mon, 3rd Dec 2018 3:01 pm 

    Thanks I AM THE FLOP for your interesting link. It’s American, so it is true. Did you see that French banner in the photo? Should even give you a clue about the true nature of the protest. Hint: muslims do NOT carry the tricolore around.

    Violent protest in Paris has left analysts contemplating what this could mean for embattled President Emmanuel Macron, amid a resurgence in populist politics ahead of European elections next year.

    “I guess what’s specific to this movement is that it is relatively apolitical, so they (the protesters) are not from just one party on the left or right. They’re white, middle-class people that are squeezed by the welfare state. They pay a lot of taxes but they don’t get a lot of benefits in return,” she told CNBC’s Julianna Tatelbaum in Paris.

  12. Davy on Mon, 3rd Dec 2018 3:05 pm 

    “Why 2018 could be the year of the euro”

    2019 could be the year of the eurobreak

  13. Davy on Mon, 3rd Dec 2018 3:07 pm 

    “Hint: muslims do NOT carry the tricolore around.”

    Hint: no PBM banners either. It is more a we have had enough of this sad state of affairs.

  14. Cloggie on Mon, 3rd Dec 2018 3:16 pm 

    “PBM banners”

    Passionate and excellent US white nationalist support for PBM:

  15. Davy on Mon, 3rd Dec 2018 3:24 pm 

    “Macron On Edge As Up To 120,000 Angry “Yellow Vests” Prepare To Storm The Bastille”

    “Whatever Macron has planned, he better act fast – as there are currently 15,000 angry French Yellow Vests signed up for next Saturday’s protests in Paris; three times as many as last weekend, while 104,000 are a “maybe.” Leaders of the so-called “Yellow Vest” movement have rejected demands to negotiate with the French government after President Emmanuel Macron ordered his prime minister to hold discussions, according to AFP. Macron and top officials are now in full damage control mode amid the most violent protests France has seen since 1968. Approximately 136,000 demonstrators donning yellow reflective vests were recorded across France on Saturday – of which approximately 5,500 protested in the French capital according to the interior ministry. The previous weekend saw 166,000 demonstrators, and 282,000 the week before that. This is France right now. You’ve heard media rip Trump for having a mid 40’s approval rating yet they’ve celebrated Macron like he’s a beloved world leader when he has a 27% approval and his country is rioting. The media may love him but the people don’t. According to the interior ministry, 412 people were arrested in during Saturday’s violent clashes in the French capital, while 263 people were injured. The worst hit areas were the wealthy west and central Paris, where stores were smashed and looted, dozens of cars were burnt, and police forces were overwhelmed by Yellow Vest protesters.”

  16. I AM THE MOB on Mon, 3rd Dec 2018 3:32 pm 

    Sir David Attenborough: collapse of civilization is on the horizon

  17. Shortend on Tue, 4th Dec 2018 7:22 am 

    Exxon throwing in the towel
    Exclusive: Exxon seeks to sell its stake in giant Azeri oil field – sources

  18. Pete Bauer on Tue, 4th Dec 2018 6:23 pm 

    Qatar does not have much oil and so they smartly invested in refineries that liquefy the natgas, bought lng supertankers, signed deals with the buyers and exported recort amount of LNG to become the World #1. This made Qatar a World #1 in per capita GDP which should have made
    Why being a member of OPEC and paying the dues and send a big delegation twice a year which costs a lot when they don’t get significant revenues from Oil.

    Saudis envy this tiny country and put baseless allegations and is trying to cut them off.

    Despite all this, they withstood and became stronger.
    The next this Qatar should do is to build facilities to convert Methane (Natgas) to Methanol.
    In China, Methanol content is 10% in their gasoline/petrol and they would like to take it to 15%.
    India also has big plans to blend Methanol in their gasoline/petrol.
    Qatar can export this fuel at a somewhat discounted price and it will make them even more richer.
    World is slowly moving from dirty petrol/diesel to cleaner fuels like Methanol/Ethanol and Qatar can play a role in this.
    Even the shipping industry is planning to substitute the dirty bunker fuel with cleaner Methanol.

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