Qatar is to leave the Organisation of Petroleum Exporting Countries next month, the Gulf state's new energy minister, Saad al Kaabi, announced on Monday.
The tiny, energy-rich Arab nation of Qatar announced on Monday it would withdraw from OPEC, mixing its aspirations to increase production outside of the cartel's constraints with the politics of slighting the Saudi-dominated group amid the kingdom's boycott of Doha. Although there has been no agreement on cuts, the fact that Russian Federation and Saudi Arabia agreed to extend their deal to manage the oil market into 2019 led to a 4 per cent increase in the price of oil on the London and NY stock exchanges, as markets took the move as a sign that further production cuts would be agreed in Vienna.
The minister also said, "Achieving our ambitious growth strategy will undoubtedly require focused efforts, commitment and dedication to maintain and strengthen Qatar's position as the leading natural gas producer".
"The nature of the animal as far as Opec is concerned is the bigger production capacity you have then the more weight you carry", Vandana Hari, founder and chief executive of Vanda Insights, told The National.
Qatar is the world's biggest exporter of liquid natural gas.
Image Saad al Kaabi explains Qatar's decision to leave OPEC at a news conference in Doha
Naeem Aslam, an analyst at online broker ThinkMarkets, said: "Qatar leaving Opec isn't great news for the oil market and the market participants haven't digested the full impact of this news".
"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 global energy scene", al-Kaabi said in a statement.
Al-Kaabi, who is heading Qatar's Opec delegation, said the decision was not political but related to the country's long-term strategy and 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".
The announcement came ahead of December 6 meeting of OPEC. Doha also plans to build the largest ethane cracker in the Middle East.