Why is Qatar sticking to its decision to withdraw from "OPEC"?

 The State of Qatar has resolved its position on returning to the Organization of Petroleum Exporting Countries (OPEC), and has said that it is not thinking of rejoining the organization and that it will work to enhance its investments in liquefied gas, of which Doha is at the forefront of the list of global exporters.

In early 2019, Doha withdrew from OPEC after 57 years of membership. It said that it will focus on the main commodity that it exports (liquefied gas), with its commitment to all that is required of countries that are not acceding to the organization.

During his

participation in the three-day energy conference hosted by Dubai, Qatari Energy Minister Saeed bin Sherida Al-Kaabi said (Tuesday, September 21) that his country is not thinking of returning to OPEC again.

Doha, according to Al-Kaabi, will continue to invest heavily in the local infrastructure of liquefied gas, which the Qatari minister confirmed that it suffers from a lack of investments.

Al-Kaabi also indicated that the high demand for liquefied gas is greater than his country's ability to meet it at the present time, stressing that the decline in investments in the field of gas leads to an increase in prices.

gas focus

The Qatari decision to withdraw from OPEC was driven by technical reasons and aspirations related to the future of Doha on the map of global liquefied gas producers, but its coincidence with the Gulf crisis raised many doubts about the motives of the decision.

However, Qatar’s leadership position among global LNG exporters with 30% of global production supports its talk of focusing on developing this sector, especially as the government aims to raise its production from 77 million tons to 110 million tons annually, and then to 126 million tons by 2030.

In addition, Qatar is considered a small oil producer with about 610,000 barrels per day, and it ranks eleventh among OPEC oil producers, and its production does not exceed 2% of the organization's production.

In view of these introductions, Qatar's future strategy appears to be based primarily on gas and not on oil, and that Doha's withdrawal from OPEC is not linked to the extension and rooting of politics as much as it is linked to the country's economic future.

“There is a need for realism and prudence about the energy transition, and gas will certainly be part of the solutions for the energy transition,” Al-Kaabi said, during the energy conference, adding: “Everyone must come together to make sure that the enormous task of dealing with climate change is achieved.”

Eye on China

And last May, Reuters quoted sources as saying that Doha is increasing its interest in China, which is hungry for liquefied gas, by involving Chinese companies in its project to expand the North Field, the largest in the world.

The agency said that this strategy is part of Doha's efforts to rely on major Western companies in technology and global spread.

The agency quoted sources as saying that Xie Weiqi, the financial director of the Chinese "CNO.C", said in April 2021 that the company was "very interested" in gas projects in Qatar.

It is not yet clear how far the talks have progressed, but one source said PetroChina was discussing buying a 5% stake in Qatar's North Field.

It is expected that China will overtake Japan next year to become the world's largest importer of liquefied natural gas.

Qatar sought to win over China, whose gas demand represented about 8.3% of total global demand in 2020, and is expected to grow by 8.6% in 2021 to reach 354.2 billion cubic meters, according to "Reuters".

The Qatari Minister of Energy has met with Zhang Jianhua, director of the National Energy Administration of China, several times since 2018; To discuss cooperation between the two sides.

Sinopec and Qatar also signed two long-term agreements, the first in 2020 and the second this year, and it opened an office in Doha.

“China is the fastest growing market, and they are looking at long-term contracts to secure supplies. So moving deals to China makes a lot of sense for Qatar,” Carlos Torres Diaz, of consultancy Rystad Energy, told Reuters.

Now that the joint LNG projects are well established, Qatar is in a position to move forward without the international companies that helped it create great wealth and raise the income of its citizens.

dominance of some members

Despite this, the Doha-based Arab Center for Studies says that the Qatari decision is not without other motives related to the dominance of some countries on "OPEC" and its conclusion of agreements outside the framework of the organization and its imposition on the least producing countries.

And "Reuters" agency quoted Hossein Kazempur Ardebili, Iran's representative to the Organization of the Petroleum Exporting Countries, as saying that Tehran understands the "disappointment of the Qataris in the organization."

Ardebili said, after Qatar withdrew from "OPEC": "There are many members of OPEC who are disappointed that the Joint Ministerial Monitoring Committee takes decisions on production, unilaterally and without prior agreement within OPEC."

Perhaps the latest dispute that erupted between Saudi Arabia and the UAE last July, regarding the consensus on the decision to reduce oil production, reflects, in one way or another, the impact of the Saudi-Russian understandings on the production process that affects the members of "OPEC".

Experts believe that Qatar's exit from OPEC will have a positive impact on its economy. Because it is taking a production line away from the path of the "OPEC" countries that depend on oil, and this will allow it to increase its focus on the gas industry and enhance its influence in its market.

quest for independence

Economic analyst Nimr Abu Kaf said that Qatar's decision to withdraw from OPEC was motivated by economic and political reasons, pointing out that Doha's global position among liquefied gas exporters was at the top of these reasons.

In a statement to "Al-Khaleej Online", Abu Kaf said that Doha seeks independence for the decision on the one hand and to distance itself from oil on the other hand; for being among the smallest producers.

The economic analyst believes that this Qatari departure from “OPEC” reinforces the hypothesis that it seeks to focus on gas production and expansion in its markets and freedom from “OPEC” and its decisions, in addition to the control of major producers such as Saudi Arabia.

In addition to the above, the dependence of Saudi decisions on the American desire with regard to oil production and the consequent effects on the rest of the members of the organization, pushed Doha further away.

Also, according to Abu Kaf, "OPEC" was among the means of pressure used against Qatar during the Gulf crisis; Hence, it will continue to strengthen its independence, which serves its expansion projects in the gas market.

Abu Kaf confirmed that Qatar's exit from the organization gave it greater freedom to conclude many deals with a number of countries away from the restrictions of "OPEC", but he indicated that there are voices saying that Doha was affected by this withdrawal.

They see, adds Abu Kaf, that the world is heading towards economic blocs; Therefore, staying within a system such as "OPEC" gives you a greater ability to impose your will on importers, but the economic analyst believes that Doha made the right decision.

He added, "Qatar has very strong relations with major countries, and its strength was manifested in maneuvering and investing relations during the Afghan crisis, in which it played a role that no other country was able to play," noting that Doha is currently using this strength to strengthen its position in the gas market.

Qatar is working to enhance its strength as a major supplier of liquefied gas to a number of countries, by strengthening its local structure and maximizing its capabilities in this market, especially with the global movement towards clean energy.