Published: Mon, December 03, 2018
Markets | By Otis Pena

Qatar pulls out of Opec oil producers' cartel

Qatar pulls out of Opec oil producers' cartel

Al-Kaabi said that Qatar chose to pull out this calendar year as to not be an OPEC member in 2019 and that it is not related to the blockade of Qatar by OPEC countries Saudi Arabia and the United Arab Emirates (UAE) and non-OPEC countries Egypt and Bahrain.

Qatar is to leave the Organization of the Petroleum Exporting Countries (OPEC) next month, the Gulf emirate's new Energy Minister Saad al-Kaabi announced on Monday.

He added, "Qatar has worked diligently during the past few years to develop a future strategy based on growth and expansion, both in its activities at home and overseas".

He added that Qatar would still continue to produce oil but would concentrate on gas production, where it is the biggest exporter of liquified natural gas in the world. Qatar wants to ramp up liquefied natural gas production from 77m to 110m tonnes a year.

Qatar joined OPEC in 1961, one year after the organisation's establishment. The Opec is estimated to now account for almost half of the global oil production and so has a major say in oil prices.

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Oil prices surged about 5 per cent on Monday after the United States and China agreed to a 90-day truce in their trade war, but Brent crude is still trading at around $62 a barrel, well below October's peak of more than $86.

The withdrawal comes as other non-Opec countries such as Russian Federation have gained more clout alongside Saudi Arabia in setting oil policy.

Amrita Sen, chief oil analyst at consultancy Energy Aspects, said Qatar's withdrawal "doesn't affect OPEC's ability to influence as Qatar was a very small player".

"In fact, we would not be surprised if other counties start to follow the same path and then we have no control over supply or demand as each individual country could just do what they like. This has jolted the price of oil higher especially the fact that Canada's largest oil-producing province is curbing the output".

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