Qatar Breaks Away From OPEC
JaMonet Rice
JaMonet Rice
As of late, the economy of the United States has taken some major hits but it is still standing. However, this is not the only news in the world of economics. On Monday, it was announced that the country of Qatar would be leaving the organization of OPEC after 57 years. For those who need a refresher about OPEC, it stands for Organization of the Petroleum Exporting Countries. Members include Venezuela, Iraq, Iran, Ecuador, Saudi Arabia, Nigeria, and many more. These are the countries responsible for a big part of oil production in the world accounting for almost 44%. Qatar’s surprising exit has many wondering why now and what comes next?
Qatar’s energy minister, Saad Sherida al-Kaabi stated that the country is leaving the organization in January in order to focus their efforts on natural gas instead of oil production. Kabbi hopes to “boost its gas production from 77 million tonnes per year to 110 million tonnes.” Which makes sense considering that Qatar’s oil production only make up 2% of OPEC’s overall contribution. Then there is the fact that Qatar has questioned their position in Qatar for some time. Former prime minister, Sheikh Hamad bin Jassim Al Thani has said that OPEC “has become an organization has become useless and adds nothing to us.” Furthermore, he also says the reason Qatar stayed in OPEC for so long was because it was “only for purposes that are detrimental to our national interest.”
However, despite being a long standing member, economists have surmised that Qatar’s withdrawal will in no way affect OPEC in the economy or energy markets, as opposed if its core member Saudi Arabia left which could result in a potential collapse of OPEC. The main concern that keeps arising is that Qatar’s future absence could bring more tension to the highly volatile Middle East. OPEC has been used to level and ease fighting in the Middle East. Despite being at war with each other for eight years during the 80’s, Iran and Iraq never left OPEC. Which is testament to how much OPEC holds together the Middle East when tensions run high. Hopefully, Qatar’s exit does not make things worse, but instead better.
Qatar’s energy minister, Saad Sherida al-Kaabi stated that the country is leaving the organization in January in order to focus their efforts on natural gas instead of oil production. Kabbi hopes to “boost its gas production from 77 million tonnes per year to 110 million tonnes.” Which makes sense considering that Qatar’s oil production only make up 2% of OPEC’s overall contribution. Then there is the fact that Qatar has questioned their position in Qatar for some time. Former prime minister, Sheikh Hamad bin Jassim Al Thani has said that OPEC “has become an organization has become useless and adds nothing to us.” Furthermore, he also says the reason Qatar stayed in OPEC for so long was because it was “only for purposes that are detrimental to our national interest.”
However, despite being a long standing member, economists have surmised that Qatar’s withdrawal will in no way affect OPEC in the economy or energy markets, as opposed if its core member Saudi Arabia left which could result in a potential collapse of OPEC. The main concern that keeps arising is that Qatar’s future absence could bring more tension to the highly volatile Middle East. OPEC has been used to level and ease fighting in the Middle East. Despite being at war with each other for eight years during the 80’s, Iran and Iraq never left OPEC. Which is testament to how much OPEC holds together the Middle East when tensions run high. Hopefully, Qatar’s exit does not make things worse, but instead better.