Oil in Global Economy Series: Qatar to quit OPEC in 2019 as disputes with neighbor linger

Qatari energy minister at a press conference in Doha announced that the country has decided to quit the Organization of Petroleum Exporting Countries (OPEC), which is the single biggest group of oil producers as disputes with OPEC partners and regional neighbors continue to linger since the summer of last year. Qatar, which joined the organization back in 1961, announced that its decision is based on the country’s long-term strategy and as it has a diminished potential in petroleum exports. Instead, Qatar would focus more on natural gas, which is considered to be having a much greater potential.

Qatar is one of the world’s leading gas exporter and has been feeling increasingly isolated in a group that is largely dominated by oil-rich Saudi Arabia, which since the summer of 2017 has led an economic and diplomatic blockade of Qatar over its alleged involvement in terrorist activities in the region and over its closer ties to Iran. Saudi And United Arab Emirates led group demanded that Qatar cut off its connection with Iran, with which it shares large natural gas field and production. Saudi Arabia also demanded that Qatar close its Al Jazeera news network.

The announcement comes just days before Saudi-led OPEC is set to meet in Vienna along with Russia to discuss potential cuts in oil production to stabilize the falling oil price. OPEC meeting is set for December 6th and 7th. Qatar will be attending that meeting but it is unlikely to participate in the cuts as it is set to quit the organization in January 2019.