“It signals OPEC’s lack of unity, even within the Saudi-Russian axis, which could spur greater volatility in oil markets.”
Recently Qatar declared its withdrawal from membership with OPEC with effective from January 1, 2019. Qatar is the largest natural gas exporter in the world has a relationship of 57 years with OPEC. Area wise it is smallest among all the countries and the share of Qatar in total oil production among OPEC countries is minimal i.e. just 2%
Saad Sherida al-Kaabi, Qatar’s minister of state for energy affairs and president and CEO of Qatar Petroleum, said that Qatar’s exit from OPEC “is not political, it was a pure business decision for Qatar’s future strategy towards the energy sector”. The countrywants to focus on its gas ambitions. Doha is the largest Liquefied Natural Gas exporter in the world and it now wants to focus more on this part rather than wasting time, efforts and resources on an organization that they are a very small player in and do not have a say in decision making. However, the actual facto behind the exit is the increasing influence of Saudi in the OPEC and its high interference in decision making. The OPEC has seen high dominance of Saudi Arabia, Russia, and the United States over policymaking in the oil market as they export more than a third of global output. Riyadh and Moscow are keen on deciding the output policies together under the pressure of US President Donald Trump on OPEC to cut down on oil prices. Also in June 2017, Saudi Arabia enacted economic and political boycott against Qatar over the allegations of Doha supporting terrorism and it’s regional rival Iran. The aforementioned factors along with the dominance of Saudi Arabia in OPEC and influence of Russia and US on major decisions
“It could signal a historic turning point of the
This step by the Gulf country is said to be a strategic decision by the officials but it more seems to be politically driven. Also, there may be a hidden agenda behind the same, one of them being speculated is Qatar may want to increase the oil production while the OPEC decided to cut down the production in the meeting held in Vienna. There will not be a significant change in price and quantity of oil in the market, but the geopolitics in the middle east may take a different shape.
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