Qatar is withdrawing from the Organization of the Petroleum Exporting Countries (OPEC) early next year, Qatar's energy minister Saad al-Kaabi said.
Speaking at a news conference, al-Kaabi said the country would withdraw from OPEC on January 1, 2019, ending a membership which has stood for more than half-a-century.
Al-Kaabi said that the move represents a "technical and strategic" change, and was not politically motivated, Reuters reported.
Qatar's energy minister added that the decision was not linked to the 18-month political and economic boycott of Doha.
The decision comes after Qatar reviewed ways in which it could improve its global standing and plan its long-term strategy.
While Qatar is one of OPEC's smallest oil producers, especially when compared to the likes of de facto leader Saudi Arabia, it is one of the world's largest producers of liquefied natural gas (LNG).
Since June 2017, OPEC kingpin Saudi Arabia — along with three other Arab states — has cut trade and transport ties with Qatar, accusing the country of supporting terrorism and their regional rival, Iran. Qatar denies the claims, saying the boycott hampers its sovereignty.
The Middle East-dominated group's final meeting of the calendar year in December is now expected to be Qatar's last.
A leading analyst of the National Energy Security Fund, a lecturer at the Financial University under the Government of the Russian Federation, Igor Yushkov, speaking to Vestnik Kavkaza, said that Qatar's decision is political in the first place.and linked to its prolonged conflict with Saudi Arabia. "It's not really related to economics, because Qatar's role in the oil market is not big - it's one of the world's largest producers of liquefied natural gas, but it doesn't produce or export much oil. 80 million tons of annual production, of which 13 million tons are consumed, is a very small amount. Qatar’s withdrawal from OPEC does not mean that the country will dramatically increase production volumes - it does not have such opportunities. Qatar simply demonstrates Saudi Arabia that Riyadh has no power over it," he explained.
"Thus, Qatar’s withdrawal from OPEC mean neither a significant increase in supply on the world market, nor the prospects for an avalanche-like collapse of the cartel.Other countries perfectly understand that it will lead to an uncontrolled increase in oil production, which will a collapse of oil prices, which would be very bad. Disadvantages of OPEC collapse outweigh advantages of free navigation, and only states with minor amounts of oil production can afford such a move," Igor Yushkov said.
The executive vice-president of NewTech Services, professor of the Gubkin Russian State University of Oil and Gas, Valery Bessel, also pointed to the irrelevance of Qatar's withdrawal from OPEC. "Qatar's oil production is incomparable with the level of the cartel's main participants. Rather, it's an attempt to untie its hands in terms of oil trade, perhaps they want to increase their quota for China due to the sanctions restrictions imposed on Iran," he said.
"This news should not be taken too seriously, as the cartel's agreements are not legally binding. The 2016-2017 agreement reduced total oil production at OPEC by only 27 million tons per year, which is insignificant in terms of global oil production at 4 billion tons of oil per year. It was just an informational occasion, which caused an increase in oil prices. And now we are also dealing with an informational occasion, which affects oil prices, albeit insignificantly, because the main trend is still the supply-demand ratio. Oil prices are at a very comfortable level for all of $60-70%, just as we expected," Valery Bessel concluded.
