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The Persian Gulf nation of Qatar says it will pull out of OPEC. OPEC is the Organization of Petroleum Exporting Countries. It's a cartel designed to manage oil prices for its members' benefit. Qatar is a tiny country with enormous energy supplies. It is withdrawing from the cartel amid a dispute with another OPEC member, its neighbor, Saudi Arabia. NPR's Peter Kenyon reports.
PETER KENYON, BYLINE: Qatar's energy minister, Saad al-Kaabi, announced the pullout at a news conference in Doha. State oil producer Qatar Petroleum confirmed the decision to withdraw in a post to its Twitter account. The energy minister says the reason for pulling out of the 15-member bloc is that Doha intends to focus on increasing its production of natural gas. Qatar is aiming for a major increase in its gas production, from 77 to 110 million tons, and al-Kaabi says it makes sense to focus on that instead of oil.
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SAAD AL-KAABI: Therefore, the state of Qatar has decided to withdraw its membership from the Organization of Petroleum Exporting Countries, OPEC, effective January 2019. This decision was communicated to OPEC this morning.
KENYON: Qatar's oil production has been in decline for some time, but al-Kaabi says it's still the world's largest supplier of liquefied natural gas, or LNG.
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AL-KAABI: I would like to reaffirm Qatar's pride in its international standing at the forefront of the natural gas producers and the biggest LNG producer in the world as the cleanest fossil fuel known to mankind.
KENYON: Qatar says this is strictly a business decision and not connected to the country's ongoing dispute with Saudi Arabia, which has been blockading Qatar for over a year. Riyadh made a series of demands aimed at reining in its ambitious smaller neighbor, including that Qatar closed down the Al-Jazeera news channel. The energy minister says Qatar is still planning to attend the OPEC winter meeting set to open December 6 in Vienna.
Prices jumped in early trading Monday. Analysts point to several factors, notably the announcement of a truce in the trade tensions between the U.S. and China, as well as the Qatari withdrawal from OPEC and the expectation that OPEC will limit production at its upcoming meeting. In addition, reports from Moscow indicate that Russian leader Vladimir Putin is willing to extend their agreement known as OPEC+, aimed at managing oil production. Any specific production cuts, however, remain to be negotiated.
Peter Kenyon, NPR News, Istanbul. Transcript provided by NPR, Copyright NPR.
