Qatar’s Opec exit a sign of rising intra-Gulf tensions
The Gulf state’s departure will not damage Opec’s operations, but will cement intra-Gulf divisions
On the global energy stage, Qatar is a natural gas mega-performer, but plays only a small part in oil production. Its approximately 600,000 b/d of output represents no more than 2pc of total Opec production.
Qatar appears to recognise that Opec's role has diminished over the past two years, with the initiative on global oil price strategy being dictated by two giant producers: Saudi Arabia and Russia. Even though Russia is not part of Opec, its voice is one that the organisation can no longer ignore.
Saudi Energy Minister Khalid al-Falih said in October that cooperation with Russia would intensify in the months ahead, allowing the two states to "establish the framework of long-term coordination" that will "allow us to bring production up or down".
With Iran constrained by sanctions and Iraq intent on expanding its oil sector after decades of disruption, smaller Opec players feel increasingly marginalised. Qatar recognises this and is taking action accordingly. In the view of Ann-Louise Hittle, macro oils analyst at Wood Mackenzie, "the smaller nations of Opec have a relatively quiet role in the group's decision making and Qatar may also see that it has less to gain from its membership now that is not involved in the GCC."
While it is possible to point to sound energy reasons for Qatar's imminent departure, its decision, as Hittle observes, cannot be seen in isolation from that crisis affecting all the GCC states: the continuing diplomatic and economic blockade of Qatar, led by Saudi Arabia and the UAE.
The decision of the Doha authorities to walk away from Opec, which some commentators have dubbed "Opexit" in reference to the UK's Brexit, may not be a direct response to the blockade. However, is unquestionably another example of Qatar being out of step with its Gulf neighbours and pursuing its own agenda.
That in itself will do nothing to improve the atmosphere in the Gulf, let alone help heal the rift that is leaving the GCC, a bit like Opec, looking less resilient and less able to influence the course of events. If the intra-Gulf dispute cannot be settled soon, Qatar might be tempted to step down from the GCC table as well.