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In Blow To Saudis, Qatar Quits OPEC Alliance

After nearly 60 years of membership in the organization, Doha decides to chart its own energy course

Qatar announced it will pull out of The Organization of the Petroleum Exporting Countries (OPEC) after 57 years of membership. Doha termed the move a “technical and strategic” decision based on the tiny Gulf state’s aim of pivoting away from oil and towards greater production of liquefied natural gas (LNG).

Qatari Energy Minister Saad al-Kaabi announced the decision during a news conference on Monday, ahead of a scheduled OPEC meeting in Vienna later this week. During that gathering, members are expected to agree to cut production on account of rapidly falling oil prices.

Al-Kaabi added that the move is unrelated to the 18-month political and economic boycott of Qatar by Saudi Arabia—OPEC’s largest and most influential member—along with the United Arab Emirates, Bahrain and Egypt. The four nations imposed the boycott last year over Qatar’s alleged support for terrorist groups and the Sunni-Arab bloc’s arch-rival Iran, charges Doha denies.

From a purely economic standpoint, the decision is not expected to have a huge impact given Qatar’s relatively limited oil production; that is, 600,000 barrels per day compared to Riyadh’s 11 million bpd. Doha is, however, the world largest exporter of LNG.

That the move was motivated purely by economic considerations strikes many analysts as highly improbable.

Hugh Miles, editor of the Arab Digest, told The Media Line that Qatar’s pull-out from OPEC is “intended as a swipe at Saudi Arabia. It is a sign that the old Gulf power structure is breaking up as countries go their separate ways.

“This is happening because Gulf countries have been driven apart by Saudi Crown Prince Mohammed bin Salman’s very reckless policies, which are intimidating small nations like Qatar, Oman and Kuwait.”

Qatar’s decision also shakes global confidence in OPEC and puts the organization on the defensive. It also raises pressing questions; namely, are other countries going to leave OPEC and will the Gulf Cooperation Council split up as well?

Qasem Qasser, a Lebanese political analyst, told The Media Line that Qatar clearly decided to adopt new policies amid the ongoing feud with its neighbors. “Doha is very close nowadays to Turkey, Iran and Russia, states interested in natural gas. Furthermore, its exit from OPEC is going to free Qatar from any commitments [so] it can form its own policies independently.

“Qatar’s move also does the U.S. a favor,” he concluded, “as it gives Washington more leverage to pressure OPEC not to raise oil prices in the future.”

Ali Abd al-Hamad, an Egyptian political analyst, told The Media Line that “the crisis between Qatar and Saudi Arabia is not new but, rather, has roots in the histories of both countries as the royal families of each used to compete over power in the region.”

Saudi Arabia has been worried about Qatar’s expanding political, financial and media clout in the Middle East, al-Hamad noted, adding, though, that Riyadh’s reaction needs to be reserved given the intense pressure it is under due to its involvement in the recent murder of U.S.-based journalist Jamal Khashoggi.

OPEC members account for nearly half of the world’s oil production, with the organization’s goal of creating uniformity among its members in the face of changing market conditions. Countries act collectively to raise or lower crude production depending on supply and demand, which influences market prices.