Qatar Withdrawal from OPEC Reveals Cracks in the Oil Exporting Cartel
New York: Qatar Minister of State for Energy Affairs Saad al-Kaabi announcement that his country intends to withdraw from the oil exporters cartel OPEC came as a surprise to observers and oil industry analysts ahead of a planned meeting in Vienna which OPEC is scheduled to meet on December 6-7 and potentially agree to cut output to support falling prices. S&P Global Platts Analytics forecasts a 1.2 million-1.4 million b/d reduction from October levels.
Minister al-Kaabi said the withdrawal decision reflects his nation’s desire to focus on plans to develop and raise its natural-gas production, analysts raised suspicions that the move has just as much to do with its dispute with Saudi Arabia.
In early November, The Wall Street Journal reported that Saudi Arabia’s top government-funded think tank was studying the possible effects on oil markets of a dissolution of OPEC, but the news report also said — citing people familiar with the matter — that the research project didn’t reflect an active debate inside the government over whether to leave OPEC in the near term.
As Qatar was finishing up plans to leave, Russian and Saudi officials were meeting in Moscow to hammer out a bilateral deal to extend the so-called OPEC+ agreement first struck in 2016. That pact turned around the oil market, but depended so heavily on the world’s two largest exporters that others felt like bystanders.
"There is a sense of frustration prevailing, especially among small producers,” said Hossein Kazempour, Iran’s OPEC governor, who has represented Tehran’s interests at the cartel for decades and been a consistent critic of Saudi oil policy.
Qatar is a relatively small crude producer within OPEC, Qatar pumped just over 600,000 b/d last month. This accounts for less than 2% of OPEC's production, according to an S&P Global Platts survey. Its three main crude grades are Al Shaheen, Qatar Marine and Qatar Land, which are shipped almost exclusively to refiners in Asia/Far East.