UAE says Qatar’s OPEC exit ‘political’

A UAE official has described Qatar’s planned exit from OPEC as political in nature and said he expects it to be followed by Qatari media attacks on the organisation.

Qatar said on Monday it would quit the Organisation of Petroleum Exporting Countries (OPEC) next month to focus on gas in a decision many perceived as an attack on the cartel’s de-facto leader Saudi Arabia.

Read: Qatar to withdraw from OPEC

“We are not saying we are going to get out of the oil business but it is controlled by an organisation managed by a country,” Qatari minister of state for energy affairs Saad al-Kaabi said.

Qatar would attend an OPEC meeting scheduled for Thursday and Friday in Vienna and would abide by its commitments, he said, adding that Doha would focus on its gas potential.

This was because it was not practical “to put efforts and resources and time in an organisation that we are a very small player in and I don’t have a say in what happens,” he added.

Saudi Arabia, along with its allies Bahrain, the UAE and Egypt, closed diplomatic, trade and transport ties with Doha last year over its alleged support of terror groups.

The UAE’s minister of state for foreign affairs, Anwar Gargash, said Qatar’s withdrawal from OPEC was a reflection of Doha’s declining influence.

“The political aspect of Qatar’s decision to quit OPEC is an admission of the decline of its role and influence in light of its political isolation,” he said on Twitter.

“The economic aspect of Doha’s withdrawal is less important and does not justify the decision at this time. From now on, we expect attacks against Opec unleashed by Qatar’s media platforms.”

OPEC’s loss of a long-standing member undermines a bid to show a united front before a meeting that is expected to back a supply cut to shore up prices. Benchmark Brent is trading at around $62 a barrel, down from more than $86 in October.

“They are not a big producer, but have played a big part in [OPEC’s] history,” one OPEC source said

It highlights the growing dominance over policy making in the oil market of Saudi Arabia, Russia and the United States, the world’s top three oil producers which together account for more than a third of global output.

Riyadh and Moscow have been increasingly deciding output policies together, under pressure from US President Donald Trump on OPEC to bring down prices.

“It could signal a historic turning point of the organisation towards Russia, Saudi Arabia and the United States,” said Algeria’s former energy minister and OPEC chairman, Chakib Khelil, commenting on Qatar’s move.

Unilateral decisions

He said Doha’s exit would have a “psychological impact” because of the row with Riyadh and could prove “an example to be followed by other members in the wake of unilateral decisions of Saudi Arabia in the recent past.”

Qatar, which Al-Kaabi said had been a member of OPEC for 57 years, has oil output of just 600,000 barrels per day (bpd), compared with Saudi Arabia’s 11 million bpd.

But Doha is an influential player in the global LNG market with annual production of 77 million tonnes per year, based on its huge reserves in the Gulf.

Al-Kaabi, who is heading Qatar’s OPEC delegation, said the decision was part of a long-term strategy and the country’s plans to develop its gas industry and increase LNG output to 110 million tonnes by 2024.

“I assure you this purely was a decision on what’s right for Qatar long term. It’s a strategy decision,” Al-Kaabi said.

The exit is the latest example of Qatar charting a course away from its Gulf neighbours since the rift began last year. It comes before an annual summit of Gulf Arab states expected to grapple with the roughly 18-month standoff.

Asked if Qatar’s withdrawal would complicate OPEC’s decision on output this week, a non-Gulf OPEC source said: “Not really, even if it’s a regrettable and sad decision.”

Al-Kaabi said state oil company Qatar Petroleum planned to raise its production capability from 4.8 million barrels of oil equivalent per day to 6.5 million barrels in the next decade.

With contributions from Reuters