DUBAI, United Arab Emirates (AP) \u2014 The tiny, energy-rich Arab nation of Qatar announced on Monday it will withdraw from OPEC in January, mixing its aspirations to increase production outside\u2026<\/b>
\nDUBAI, United Arab Emirates \u2014 The tiny, energy-rich Arab nation of Qatar announced on Monday it will withdraw from OPEC in January, mixing its aspirations to increase production outside of the cartel\u2019s constraints with the politics of slighting the Saudi-dominated group amid the kingdom\u2019s boycott of Doha.
The surprise announcement from Qatar\u2019s minister of state for energy affairs, Saad Sherida al-Kaabi, again throws into question the role of the cartel after needing non-members to push through a production cut in 2016 after prices crashed below $30 a barrel.
It also marks the first time a Mideast nation has left the cartel since its founding in 1960.
In a statement, al-Kaabi said Qatar, the world\u2019s largest exporter of liquified natural gas, planned to increase its exports from 77 million tons of gas per year to 110 million tons. He also said Qatar wants to raise its oil production.
\u201cIn light of such efforts and plans, and in our pursuit to strengthen Qatar\u2019s position as a reliable and trustworthy energy supplier across the globe, we had to take steps to review Qatar\u2019s role and contributions on the international energy scene,\u201d al-Kaabi said.
There was no immediate comment from Vienna-based OPEC, which is to meet this month and discuss possible production cuts. In November, Saudi Energy Minister Khalid al-Falih said OPEC and allied oil-producing countries will likely need to cut crude supplies, perhaps by as much as 1 million barrels of oil a day, to rebalance the market.
Qatar produces only some 600,000 barrels of crude oil a day, making it OPEC\u2019s 11th biggest producer. The loss of production, under 2 percent of overall OPEC supply a day, won\u2019t greatly affect the cartel\u2019s position in the market.
Anas Alhajji, an oil analyst, said Qatar\u2019s decision \u201chas no impact on the market either way whether they\u2019re in or they\u2019re out.\u201d
\u201cThe cost for them is higher than the benefit\u201d of remaining in OPEC, Alhajji said. \u201cThis is just like shutting down a losing business.\u201d
Sheikh Hamad bin Jassim Al Thani, Qatar\u2019s former prime minister who remains a powerful figure in the country, called the nation\u2019s withdrawal from OPEC a \u201cwise decision.\u201d
\u201cThis organization has become useless and adds nothing to us,\u201d Sheikh Hamad wrote on Twitter. \u201cThey are used only for purposes that are detrimental to our national interest.\u201d
Qatar, a country of 2.6 million people where citizens make up over 10 percent of the population, discovered its offshore North Field gas deposit in 1971, the same year it became independent.
It took years for engineers to discover the field\u2019s vast reserves, which shot Qatar to No. 3 in world rankings, behind Russia and Iran, with which it shares the North Field. It\u2019s also made the country fantastically wealthy, sparking its successful bid for the 2022 FIFA World Cup.
Qatar\u2019s wealth also has seen it take on a larger importance in international politics. Its political stances, often supporting Islamists, have drawn the ire of its neighbors, particularly Saudi Arabia, OPEC\u2019s largest exporter.
In June 2017, Bahrain, Egypt, Saudi Arabia and the United Arab Emirates cut ties to Qatar in a political dispute that continues to this day. They also launched an economic boycott, stopping Qatar Airways flights from using their airspace, closing off the small country\u2019s sole land border with Saudi Arabia and blocking its ships from using their ports.
They say the crisis stems from Qatar\u2019s support for extremist groups in the region, charges denied by Doha. The four nations have also pointed to Qatar\u2019s close relationship with Iran, with which its massive offshore gas field. Qatar restored full diplomatic ties to Iran amid the dispute.
OPEC, or the Organization of the Petroleum Exporting Countries, was formed in 1960 as a reaction to Western domination of the oil industry.
Qatar was the first nation outside of its founding members to join the cartel, entering its ranks in 1961. Qatar is a nation about the size of the U. S. state of Connecticut, which juts out from the Arabian Peninsula into the Persian Gulf. It hosts the al-Udeid Air Base, the home of the forward headquarters of the U. S. military\u2019s Central Command and some 10,000 American troops.
With Qatar, OPEC had 15 members, including Algeria, Angola, Congo, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates and Venezuela. OPEC nations like Ecuador, Gabon and Indonesia have either withdrawn or suspended their membership in the past, only later to rejoin. Qatar could potentially do the same.
OPEC sets production targets for its members in an effort to control the price of oil available on the global market. However in recent years, oil-producing nations outside of the group like the United States and Russia have played a larger role in affecting prices.
Among its members, Saudi Arabia is by far its largest oil exporter, hitting a record high in November of over 11 million barrels of oil a day.
President Donald Trump repeatedly has criticized both OPEC and American ally Saudi Arabia over rising oil prices in recent weeks, demanding a production hike to drive down U. S. gasoline prices. That rising supply, coupled with the Trump administration allowing many countries to continue to import Iranian oil despite his targeting of Tehran with sanctions, has seen global prices drop.
Benchmark Brent crude for instance reached over $85 a barrel in early October, only to drop sharply in the time since. It was over $61 a barrel in trading Monday.
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This story has been corrected to show that the name of the minister is Saad Sherida al-Kaabi.<\/p>\n