The Kuwaiti expert said about the consequences of withdrawal of Qatar from OPEC

© REUTERS / Ernest Scheyder/File PhotoДобыча oil. Archival photoThe Kuwaiti expert said about the consequences of withdrawal of Qatar from OPEC© REUTERS / Ernest Scheyder/File Photo

Qatar’s decision to withdrawal from OPEC will not affect the oil market, prices and the organization, given the small share of this country in global oil production, said independent Kuwaiti expert Kamel al-Harami.

On the eve of Qatar has announced the release of OPEC from 1 January 2019, explaining this decision by the desire to focus on the production of gas and production of liquefied natural gas.

«The share of Qatar in global oil production of approximately 600 thousand barrels per day. This is a very modest part in comparison with the share of other OPEC members. The decision about leaving the organization will not have any negative impact on the work of the organization, markets, prices and the cooperation of countries-members and non-members of OPEC,» said al-Harami in an interview with RIA Novosti.

The expert also expressed doubt that the decision was influenced by intention of Qatar to concentrate efforts on gas production. «It is illogical to say that this decision was influenced by the desire to increase gas production, as gas deposits in Qatar have long been known, but previously for membership in OPEC, this factor is not provided. The reasons for this decision we, of course, unknown. The reason can be the solution to (Qatar — ed.) any one task or set of strategic objectives,» said a Kuwaiti expert in oil and gas markets.

Al-Harami noted that in the current situation, important is the interaction of members and non-members of OPEC to control markets and prices. «At the present time, it is important positive cooperation between OPEC and independent producers to control markets. Cooperation with Russia is positive. Mutual understanding between Riyadh and Moscow, between Moscow and other members of the organization aimed at stabilizing oil market and prices in the interests of all parties», — said the Agency interlocutor. He also expressed the view that the exit of Qatar from the OPEC, most likely, will not lead to entry into the organization new members. «I do not think that the exit of Qatar from OPEC will cause the occurrence of another country,» said al-Harami.

The statement of Qatar on withdrawal from OPEC was made on the eve of the meeting of the Ministers of the countries members of the organization, which will be held on December 6 in Vienna. There on 5 December at a meeting of the Ministerial monitoring Committee of OPEC+, and 7 December, the Ministers of all 25 member countries of the OPEC agreement+.

OPEC and several non-organisation countries (OPEC+) agreed in late 2016 in Vienna on the reduction of oil production to 1.8 million barrels per day from the level of October 2016, of which 300 thousand were in Russia. The contract started from the beginning of 2017 and has been extended until the end of 2018. In June 2018 OPEC+ agreed goal is to escape from the fulfillment of the terms of the agreement, which then accounted for 47%. We explained that in practice this will mean increasing production by 1 million barrels per day. Recently, the parties to the transaction are increasingly talking about the risk of oversupply of the commodity on the market in 2019, which could affect the decision to return to the reduction of oil production as part of the transaction.

The Kuwaiti expert said about the consequences of withdrawal of Qatar from OPEC© Infographicsrussia forces in the world oil market