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Is it smart move for Qatar to leave OPEC?

Oil&Gas Materials 5 December 2018 11:23 (UTC +04:00)

Baku, Azerbaijan, Dec.5

By Leman Zeynalova – Trend:

Qatar’s exit from OPEC was to be expected as there is almost no reason for this country to be still in the cartel, Cyril Widdershoven, a Middle East geopolitical specialist and energy analyst, a partner at Dutch risk consultancy VEROCY and SVP MEA-Risk, told Trend.

“It is a small oil producer with main focus on gas production. The only reason for membership was that this country has always been a part of the oil cartel,” said the expert.

“Is it a smart move to leave? Don't think so, as it removes part of the international power. Any statement by Qatar is now anymore not as an OPEC member.”

Also, Widdershoven believes that it will not have any insights anymore of the coordination by Saudi and others in the region.

“Possible reason right now to leave OPEC is also Qatar’s outcast position in the Arab world,” noted the expert.

He pointed out that it will not affect the oil market related to volumes as Qatar is a small producer.

“It also will not be able to produce significantly more as its fields are having extreme production problems at present, such as the Al Shaheen field,” added Widdershoven.

Qatar’s Energy Minister, Saad al-Kaabi, has announced that the country will leave OPEC with effect from 1st January 2019. Mr. al-Kaabi pinned the decision on the country’s desire to focus on investing in its LNG capacity and that, as a small oil producer, it had little influence over OPEC policy.

Saad al-Kaabi said Qatar has decided to withdraw its membership form OPEC effective January 2019 and this decision was communicated to OPEC.

The announcement comes ahead of the meeting by OPEC and its allies including Russia on Dec. 6-7 to discuss cutting supply.

The minister said the decision was not easy as Qatar has been in OPEC for 57 years, but that the country’s impact on OPEC production decisions was small.

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Follow the author on Twitter: @Lyaman_Zeyn

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