Qatar announced Monday that it is leaving the Organization of the Petroleum Exporting Countries (OPEC), the oil cartel led by Saudi Arabia.
It is being seen by many as a slap in the face to the Saudis.
The Saudi government led a June 2017 campaign to isolate Qatar, the tiny country on its border, which it said was supporting terrorism. The Saudi Kingdom banned Qatari airplanes and ships from using Saudi airspace and sea routes and blocked the only land crossing onto the Qatar peninsula.
Saudi Arabia threatened in 2018 to dig a ditch along its border with Qatar and turn Qatar into an island.
Qatar’s move comes just days before OPEC is to meet in Vienna on Thursday.
“One of the important things to understand about Qatar is that it's actually not that big of an oil producer,” says energy expert Ellen R. Wald. “In fact, its major energy product is liquefied natural gas. Qatar only produces about 600,000 to 620,000 barrels per day of oil, but it makes most of its money off of natural gas exports.”
Wald, who is president of Transversal Consulting and a senior fellow at the Atlantic Council's Global Energy Center, says Qatar’s decision would be both a personal matter for the Qatari leadership and also a domestic political matter.
“[Qatar] probably sees no reason to be part of a group that has its positions dictated by Saudi Arabia, when Saudi Arabia is making statements outwardly that it would like to basically end Qatar, as Qatar exists today,” she said.
OPEC was founded in September 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. But these countries were joined by a whole host of other countries as more oil was discovered in other places. In 1961, Qatar joined, followed by Indonesia, Libya, the UAE and Algeria. Nigeria, Ecuador and Gabon came in the 1970s, followed by Angola, 2007; Equatorial Guinea, 2017; and the Republic of Congo, 2018.
Wald says that leaving the OPEC does not really hurt Qatar, because it doesn't produce or export much oil. But it is a jab at Saudi Arabia, because if more small oil producers like Qatar leave the group that will decrease the overall influence of OPEC.
Saudi Arabia, the UAE and Kuwait dominate OPEC. Nigeria is important and Iran has great potential, she said.
“If the rest of them all get together and leave — if the smaller OPEC nations feel they're not being listened to — then that really could decrease OPEC's overall influence in the market,” Wald explained.
Qatar’s Minister of Energy Affairs, Saad Sherida al-Kaabi, said Monday that Qatar would leave the organization on Jan. 1 but will attend this week's OPEC meeting.