In a daring and totally unexpected move, Qatar’s Energy Minister Saad Sherida al-Kaabi announced his government’s intention to suspend Qatar’s membership in the Organization of the Petroleum Exporting Countries (OPEC), effective January 1, 2019. Minister al-Kaabi explained in Doha on December 3, 2018 that “The withdrawal decision reflects Qatar’s desire to focus its efforts on plans to develop and increase its natural gas production from 77 million tonnes per year to 110 million tonnes in the coming years.”

Despite the declared objective of the move, the political significance of this decision far outweighs its economic implications.  After all, Qatar is one of OPEC’s smallest producers. Its current oil production is around two percent of OPEC’s total output. Indeed, over the past five years, “the amount of oil Qatar produced has steadily declined from about 728,000 barrels per day (bpd) in 2013 to about 607,000 barrels per day, or just under two percent of OPEC’s total output.” OPEC’s overall production is estimated at 25 million bpd, with Saudi Arabia alone producing 10-11 million bpd (i.e. 44 percent of the total output by the oil cartel).

Politically, however, the decision by Doha to pull out of the powerful bloc of 15 oil producers was quite significant in impact and timing. The maverick government in Qatar became essentially the first Arab or Middle Eastern member to quit the organization after a membership lasting 57 years. The optics are clearly damaging to the reputation of OPEC and its remaining members. Leaving OPEC is apt to raise serious questions regarding the long-term durability of the organization and its added value to all its members, particularly smaller states like Qatar. This is quite harmful to ongoing recruitment attempts by OPEC in Africa and Latin America to enlist new members, the most recent being Congo (2018), Equatorial Guinea (2017) and Gabon (2016).

The maverick government in Qatar became essentially the first Arab or Middle Eastern member to quit the organization.

The question of timing is equally significant. Why did Qatar choose this specific time, three days before the December 6 OPEC meeting in Vienna, to announce its sudden departure? Qatari officials insist privately and publicly that their decision was strategic and solely motivated by their desire for punctuality and transparency and not by regional politics, including their ongoing dispute with boycotting neighbors led by Saudi Arabia.

Why is Qatar Quitting OPEC?

In explaining their rationale for leaving OPEC, Qatari officials downplayed political considerations and emphasized first of all their priority to focus their future efforts on maintaining and boosting their lead as “the world’s largest exporter of liquefied natural gas (LNG).” Today, the country accounts for almost 30 percent of the world’s total LNG production and is determined to pursue a strategy based on further growth and expansion, at home and abroad. Energy Minister al-Kaabi stated unequivocally that “In light of such efforts and plans, and in our pursuit to strengthen Qatar’s position as a reliable and trustworthy energy supplier across the globe, we had to take steps to review Qatar’s role and contributions on the international energy scene.”

Second, although some observers and political analysts might appreciate Doha’s attempt to deemphasize the political circumstances surrounding its decision, it strains credulity to believe that the decision was taken in total isolation from the regional conflict and tensions characterizing its relations with the neighboring OPEC members that imposed a boycott against Qatar in June 2017. Clearly, Qatar has come to the conclusion that the GCC crisis has become a permanent feature in Arab Gulf politics and the time has become ripe for Doha to use one of its stronger cards to distance itself from its regional detractors by taking this political swipe at Riyadh while insisting on attending this week’s OPEC meeting in Vienna and honoring its commitments to the organization.

Third, Qatar is admittedly a limited player in the oil production business and has consequently been reassessing its own contributions and benefits from maintaining its OPEC membership. Former Prime Minister and Foreign Minister Shaikh Hamad bin Jassim bin Jabor al-Thani tweeted1 that “The withdrawal of the state of Qatar from OPEC is a wise decision, and this organization has become useless and adds nothing to us. It is used only for purposes that are detrimental to our national interest.”

Qatari officials insist privately and publicly that their decision was not motivated by regional politics.

Mr. al-Kaabi further explained, “We are not saying we are going to get out of the oil business, but it is controlled by an organization managed by a country,” pointing clearly to Saudi Arabia without naming the kingdom. He added, that Qatar was unwilling “to put efforts and resources and time in an organization that we are a very small player in, and I don’t have a say in what happens.” In other words, Qatar’s departure from OPEC “indicates the low political value it sees in the group.”

Another Step for Independence

The controversial step by Qatar has generated both public praise and disdain within the Arab region and beyond. Critics in the Arab Gulf, particularly those affiliated with the boycotting GCC member states, point to Qatar’s symbolic gesture as another sign of vain pride due to the limited impact of the withdrawal on global oil supply and demand. Qatar’s exit from OPEC, they insist, “means little for OPEC’s market share. Admittedly, Qatar is a small producer, ranking as the 11th largest on the list of OPEC producers, thus its withdrawal is not expected to be significant unless other dissatisfied members follow suit.

Proponents of Qatar’s exit from OPEC, however, praise the move as a further sign of independence by Doha and a direct challenge to Saudi hegemony over OPEC production and pricing policies. They attribute the decision by Doha to growing Qatari nationalism and assertiveness by a youthful leadership that feels significantly empowered by overwhelming economic and political success in resisting the 18-month Saudi-led boycott against Qatar and weathering the GCC crisis against all regional and international odds.

Andreas Krieg, a political risk analyst at King’s College London, concluded that “There is a sentiment in Qatar that Saudi Arabia’s dominance in the region and the region’s many institutions has been counterproductive to Qatar achieving its developmental goals…It is about Qatar breaking free as an independent market and state from external interference.”

Khalil E. Jahshan is the Executive Director of Arab Center Washington DC. To learn more about Khalil E. Jahshan click here

1 Source in Arabic.