Qatar to Quit OPEC Amid Political Fractures

Qatar said it will leave the Organization of the Petroleum Exporting Countries next month, citing toxic politics throughout the Middle East as the reason it is quitting the alliance of oil exporting nations.

Qatar, a member of OPEC since 1961, is leaving the group to focus on its liquefied natural gas production, Energy Minister Saad Sherida Al-Kaabi told a news conference in Doha early Monday morning. Qatar has been struggling against a blockade against it by Saudi Arabia since 2017, and a critical onslaught against OPEC by U.S. President Donald Trump.

Representatives of OPEC did not immediately comment on Qatar leaving the organization. Qatar is OPEC’s 11th-biggest oil producer, accounting for less than 2% of total output, so its departure may not have a significant impact. Yet it sets a negative precedent for a group that prides itself on putting shared economic interests above politics — even extreme events such as the Iran-Iraq war in the 1980s or Saddam Hussein’s 1991 invasion of Kuwait did not disrupt the OPEC alliance.

And while Qatar does not produce a lot of oil, it is a giant in natural gas. Counting both its production of crude and condensate — a form of ultra-light oil — the nation pumps about 1 million barrels a day, less than a 10th of Saudi Arabia’s output. But add in natural gas, supplied to its neighbours by pipeline and globally as LNG, and the nation’s output rises to 4.8 million barrels a day, with plans to expand that to 6.5 million, according to the Qatar government.

In the history of the cartel, only three nations have left the organization, although two later re-joined. Most recently, Indonesia suspended its OPEC membership because its status as a net importer of oil made joining the 2016 production cuts impractical.

Qatar was the first country to join OPEC after the five founding nations — Iran, Iraq, Kuwait, Saudi Arabia and Venezuela — formed the group in 1960. It’s the first Middle Eastern nation to leave the group.