Expert: Qatar's withdrawal from OPEC may have temporary impact on oil market
Baku, Azerbaijan, Dec. 4
By Taleh Mursagulov - Trend:
Qatar's withdrawal from OPEC may have a temporary impact on the oil market, Gulmira Rzayeva, senior researcher on energy issues at the Center for Strategic Studies under the President of Azerbaijan, an expert at the Global Gas Center of the World Energy Council and an expert at the Oxford Institute for Energy Studies, told Trend.
She noted that Qatar's withdrawal from OPEC won't have a significant impact on the oil market.
"Qatar, in fact, is a country that is not a major producer and exporter of oil," she said. "In Qatar, oil is produced when gas condensate is extracted."
The expert said that the market constantly "nervously" responds to such political statements. This event may have a short-term impact, but the oil market will subsequently stabilize, she noted.
Commenting on the statement by Qatari Energy Minister Saad al-Kaabi that the country wants to focus on the production of gas and liquefied natural gas (LNG), Rzayeva noted that growing competition makes Qatar's position on the global LNG market complicated.
"New US companies appear on the LNG market," she said. "There are about 2,450 energy companies in the US. Not a single of these companies is a state-owned or state-controlled one, and therefore competition there is based on basic economic rules, that is, on demand and supply, and of course it is based on competitive prices. The one who offers a better price for customers gets a market, and in this respect, Qatar's position is somewhat complicated in obtaining market niches in the global LNG market, particularly in Europe."
Qatar will continue to focus on the policy of obtaining as many market niches as possible throughout the world, particularly in Europe, Rzayeva added.
"Therefore, Qatar mayincrease gas production, which would entail an increase in condensate oil production," she said. "But this won't have a major impact on the oil market."
She noted that this is related to the small volumes supplied by Qatar to global oil markets compared to other major suppliers.
"Qatar is mainly interested in the LNG market than in oil market," she said.
Rzayeva also admitted that Qatar may leave OPEC due to the cartel's policy.
"OPEC constantly makes some decisions on the extension of the oil production deal, on quotas for each country, but this may not suit other OPEC members," she said. "Some countries in the cartel want to export more, some less, for some countries, higher oil prices are beneficial, and for some countries lower. That is, there, perhaps, the interests of OPEC members don't always coincide, and perhaps this happened in the case of Qatar."
In addition, the expert forecast that by the end of 2018, oil prices will be within $60-$65 per barrel.
Qatari Energy Minister Saad al-Kaabi had earlier stated that Qatar is withdrawing from the Organization of the Petroleum Exporting Countries (OPEC) as of January 2019. Commenting on the decision, the minister noted that Qatar wants to focus on the production of natural and liquefied gas.
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