By becoming the first of the energy-rich Gulf States to withdraw from OPEC, Qatar has signalled its disapproval with an organisation under increasing Saudi interference.
Qatar’s decision to leave OPEC is aimed at reinforcing the country’s autonomy from its Arab neighbours, says Kristian Coates Ulrichsen, the author of “The Gulf States in International Political Economy.”
Writing for the New York Times, Ulrichsen says that by becoming the first of the energy-rich Gulf States to withdraw from OPEC, Qatar has signalled its disapproval with an organisation under increasing Saudi interference.
Saudi interference became clear in April 2016, when during a meeting in Doha, Prince Mohammed, then the deputy crown prince, intervened to thwart an output agreement between OPEC and non-OPEC states. Qatar’s Emir Tamim bin Hamad Al Thani had worked hard to secure the agreement both within OPEC and with Russia, only to see the Saudis pressure Qatar to disinvite Iran, a fellow OPEC member, and sink the deal midway through the meeting.
Ulrichsen points out that Qatar’s decision to withdraw from the oil pact builds on two decisions taken before and after Saudi Arabia and its allies cut ties with Qatar and imposed a blockade last June. In April 2017, it decided to significantly expand its production of LNG to increase its natural gas capacity by 43 percent to 110 million tons annually.
The Qatari leadership also responded to the attempt to isolate Qatar by forging an array of new longer-term natural gas agreements with partners worldwide, including China, Japan and Britain, to demonstrate that Qatar remained open for business.
Qatar has made a strategic decision to direct national resources toward gas rather than oil as the backbone of its energy policy. A new deal to supply LNG to Britain, which receives nearly a third of its gas supply from Qatar, was announced last June. In September Qatargas signed a 22-year agreement to supply PetroChina with 3.4 million tons of LNG a year through to 2040.
Despite the Saudi-led siege continuing with very little success, neither Saudi Arabia nor the Emirates are willing to back down or concede defeat. The GCC crisis only continues to reshape regional and institutional partnerships and increase the degrees of separation among the disputing nations.