Qatar will leave the Organization of Petroleum Exporting Countries as of January 2019, its Energy Minister Saad Sherida al-Kaabi told a news conference in Doha on Monday.
Saad al- Kaabi said that Qatar is leaving OPEC to focus on its liquefied natural gas production. One aspect of this decision was quite obvious: extremely bad relations with Saudi Arabia, which has led a blockade against his country since 2017; and a rhetorical onslaught from U.S. President Donald Trump against the OPEC.
The group that initiated the Saudi-led blockade, which also includes Egypt, the UAE, and Bahrain, accused Qatar of supporting terrorist groups and being too close to Iran. Qatar has denied the accusations and launched counter-accusations against the leader, Saudi Arabia, of trying for a regime change in the Gulf state.
While Saad al-Kaabi said the decision to quit had no relation to a Saudi-led blockade by neighbors Qatar has been subjected to for a year and a half now, tense relations with the biggest producer in the region must have had an effect on the final decision.
Qatar is the world’s largest exporter of liquefied natural gas, but it has very little influence over OPEC decisions as it only produces 600,000 bpd, which ranks it among the smaller OPEC producers giving it a minuscule clout in OPEC policy.
With the highest GDP per capita, “The Richest Country in the World” Qatar has been the largest LNG exporter. Qatar today exports ~11 Bcf/d, accounting for almost 30% of the global LNG market and more than triple what the fourth place U.S. ships out.Leaving a huge surplus available for export, Qatar’s gas production has been booming ~15% per year, about double the growth rate for domestic demand.
There is much more to come: Qatar has 880 Tcf of proven gas reserves, or 13% of the global total, versus 310 Tcf for the U.S. Qatar seeks to extend its dominance by lifting a self-imposed 2005 moratorium on development of the immense North Field, which it shares with Iran.
This decision is a rare example of the toxic Middle Eastern politics fracturing OPEC that held together for decades through numerous sanctions, upheavals and wars. Indeed this move by Qatar presents a significant public relations problem for tje entire bloc, but it won’t increase global oil prices as oil production has been steady overall.