Magazine

English Hindi

Index

International Relations

Qatar Exit To OPEC

Qatar Exit To OPEC

Relevance

GS 2 || International Relations || International Organizations   || OPEC

Why in news ?

  • Qatar has decided to withdraw its membership from Organization of Petroleum Exporting Countries (OPEC) effective from January 2019 to focus on Liquefied Natural Gas production.

What’s the issue?

  • The decision to pull out after more than five decades comes at a turbulent time in Gulf politics, with Doha under a boycott by former neighbouring allies including Saudi Arabia for 18 months.

Saudi -Qatar Conflict :

  • Saudi Arabia has been leading a regional blockade on Qatar that has seen trade and travel links severed over its alleged support for terrorism.
  • OPEC members, Saudi Arabia and the United Arab Emirates, and fellow Arab states Bahrain and Egypt have imposed a political and economic boycott leading to the regional blockade on Qatar since June 2017.
  • However, according to Qatar, Saudi led blockade is aimed to impinge on its sovereignty.

Impact Analysis :

  • Qatar will continue to produce oil and seek deals in countries including Latin America’s top oil producer Brazil.
  • It could signal that smaller producers are dissatisfied with the cartel’s dominance by Saudi Arabia and Russia. So a group of small producers exiting the cartel will decrease OPEC’s influence in the oil market.

Prelims bits : OPEC :

  • The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental Organization, created at the Baghdad Conference in 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.
  • OPEC is a cartel that aims to manage the supply of oil in an effort to set the price of oil on the world market, in order to avoid fluctuations that might affect the economies of both producing and purchasing countries.
  • According to its statutes, OPEC membership is open to any country that is a substantial exporter of oil and that shares the ideals of the organization.
  • Currently, the Organization has a total of 15 Member Countries. The current OPEC members are the following: Algeria, Angola, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, the Republic of the Congo, Saudi Arabia, United Arab Emirates, and Venezuela.
  • Ecuador suspended its membership in December 1992 but rejoined OPEC in October 2007.
  • Indonesia suspended its membership in January 2009, reactivated it again in January 2016, but decided to suspend its membership once more in November 2016.
  • Gabon terminated its membership in January 1995. However, it rejoined the Organization in July 2016.
  • OPEC has its headquarter in Vienna, Austria