Doha/Vienna: Qatar, known to be a leading economy in the Gulf, has decided to exit from OPEC the association of the Oil Producing and Exporting Countries, controlling nearly 44% of the world’s oil trade. Saad Al Kaabi, the Energy Minister of Qatar, made this announcement on Monday. This decision is believed to be a result of the dispute between Qatar and Saudi Arabia, who is controlling the OPEC since last year. But Qatar has said that the reason behind the decision is that it needs to concentrate on the natural gas sector.
The Energy Minister of Qatar announced his country’s exit from OPEC saying ‘Qatar will exit from the OPEC from 1st January 2019. This decision of Qatar is a result of the changes in its policy and technical approach. There is no political motive behind the decision. It is not related in any way to the political and economic sanctions imposed against Qatar since the last 18 months.’ At the same time, Energy Minister Saad Al Kaabialso said that Qatar would henceforth be concentrating on the natural gas sector.
Al-Kaabi clarified ‘Qatar currently produces 77 million tonnes of natural gas every year. The plan is to take this production to 110 million tonnes in the next few years. Qatar will be making efforts in that direction.’ Qatar is third on the natural gas producing countries, and it is said to be having natural gas reserves of nearly 240 million cubic metres.
The OPEC meet is scheduled to be held this week in Vienna, and the announcement by Qatar to exit OPEC just before the meeting has created a stir. Before this, Indonesia, Gabon and Ecuador had temporarily withdrawn from the OPEC. But these countries had subsequently re-joined the OPEC. Qatar has given clear indications of permanently exiting OPEC citing the reasons for policy change.
Efforts for the creation of groups like OPEC in the natural gas sector can be one more factor contributing to the decision. Russia is making efforts in that direction for the last few years. Russia is claimed to have opened a dialogue with countries like Qatar, Iran and Australia. But none of these countries has given their confirmation. There is a possibility that these efforts will gain momentum once Qatar is out of the OPEC.
Although Qatar has given policy deviation as the reason for the exit, the critical factor has been the Qatar-Saudi dispute over the last year. Since June last year, there has been an extreme disagreement between these two Islamic countries and Saudi along with its Arab allies has imposed economic and political sanctions against Qatar. Being a developed and healthy economy, Qatar has faced the challenge successfully, and hence the tension has still not been resolved. The mediation efforts of the United States and other countries have also failed.
Against this background, the decision to exit a vital organisation like OPEC, dominated by the Arab-Islamic countries indicates a rift in these countries. According to the analysts claim, this has sent a clear message that all is not well in the Gulf and this can result in significant changes in the equations within the Gulf countries.