Qatar has announced that it will be withdrawing from the Organization of the Petroleum Exporting Countries (OPEC) in January. Saad Sherida al-Kaabi, Qatar’s minister of state for energy affairs, made the announcement. If it goes through with the move, Qatar would be the first Middle East nation to leave the organization since its founding in 1960.
OPEC was formed to counter the domination of the oil industry by the West. Qatar joined in 1961. The organization sets production targets for its members to control the price of oil on the global market. Including Qatar, the 15 members of OPEC are Algeria, Angola, Congo, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates and Venezuela.
Qatar is currently the world’s largest exporter of liquefied natural gas and third in world rankings for oil, behind Russia and Iran. However, Qatar contributes only a fraction of OPEC’s overall production, only about 600,000 barrels of crude oil a day. As OPEC’s 11th biggest producer, its withdrawal won’t greatly affect the organization’s position in the market.
Qatar’s move is being seen as a rebuke of the Saudi Arabia-dominated organization. In June 2017, Bahrain, Egypt, Saudi Arabia and the United Arab Emirates launched an economic boycott against Qatar over its support for extremist groups in the region and its close relationship with Iran. They also closed the country’s sole land border with Saudi Arabia, blocked its ships from using their ports, and stopped Qatar Airways flights from using their airspace.
OPEC is currently deliberating production cuts to stop a decline in global crude oil prices. In November, Saudi Arabia’s energy tsar Khalid al-Falih said OPEC, and allied oil-producing countries, might need to cut crude supplies by as much as 1 million barrels of oil a day to rebalance the market. OPEC pushed through a production cut in 2016 after prices crashed below $30 a barrel, causing prices to rise steeply before falling to roughly double what it was before the cuts.