Qatar is withdrawing from the Organization of the Petroleum Exporting Countries (OPEC) as of January 2019, Saad al-Kaabi, the country's energy minister said on Monday.
Crude oil has not been included in the list of hundreds of products each side has slapped with import tariffs, but traders said the positive sentiment of the truce was also driving crude markets. The country reportedly produces 600,000 barrels of oil a day compared to more than 27 million from all the members of the cartel.
H.E. Mr. Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs, announced Qatar's withdrawal from OPEC at a press conference in Doha and said the organization was informed. Qatar has announced that it will withdraw from the OPEC group of oil-producing nations.
"But it's a disappointment for OPEC because they've been trying to attract members". "This is just like shutting down a losing business".
According to the minister, the emirate will no longer remain committed to OPEC agreements.
"We'd suspect that numerous members are wary of how much influence the United States has over Saudi Arabia and whether this leads to decisions that are not necessarily in the best interests of OPEC", Kelty stated.
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They are accusing Qatar of supporting terrorism. Donald Trump has repeatedly tweeted against Opec in recent months, complaining prices were too high and expecting Gulf members to support his campaign against Iran by replacing its exports lost to sanctions.
Twitter handles were abuzz with the news break."It is better if OPEC breaks, free market may stablise oil prices", read a tweet.
Qatar was the first country to join OPEC after the five founding nations - Iran, Iraq, Kuwait, Saudi Arabia and Venezuela - formed the group in 1960. Qatar is a nation about the size of the USA state of CT, which juts out from the Arabian Peninsula into the Persian Gulf.
Qatar's decision to leave OPEC has been described as a "surprise" by Cantor Fitzgerald Europe. Ecuador left in 1992, unwilling to pay the $2 million membership fee, but rejoined in 2007. Qatar could potentially do the same.
The Gulf state has also been at loggerheads with its much bigger neighbor Saudi Arabia, the de facto OPEC leader.
Qatar is OPEC's 11th-biggest oil producer, accounting for less than 2 per cent of total output, so its departure may not have a significant impact on discussions this week to cut production in conjunction with allies including Russian Federation. QNB's monthly monitor report for November noted the country's oil production fell to 570000/d in September from 612000b/d in August.
International Brent crude oil futures were up $2.89 per barrel, or 4.9 per cent, at $62.35 a barrel.