Qatar has been part of the OPEC council since 1961, but the country just announced its intent to leave on Monday. Should the severance move forward, Qatar would leave the cartel on January 1, 2019.
According to Qatar's newly-appointed energy minister, Saad Sherida Al-Kaabi, Qatar’s decision to withdraw from the OPEC council mainly owed to the fact that it wanted to focus its efforts on plans to develop and increase its natural gas production from 77 million tonnes per year to 110 million tonnes in the coming years. However, industry analysts opined that the diplomatic and economic embargo by its Arab neighbors was the main reason behind this step.
So, what does this mean for the OPEC council?
It could be a big setback for OPEC, which currently supplies nearly 44% of the world's crude oil, especially when it has been trying to increase its member count and exercise dominance over the oil market. Left with just 14 members now, the future of the OPEC is now exposed to systematic risk with the exit of Qatar.
Though Qatar's exit was sudden and unexpected, at the end of the day it should not have a significant impact on the oil markets, as Qatar is not a major oil producer when compared to other OPEC members.