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Friday, January 21, 2022

Qatar ‘unlikely’ to rejoin OPEC+ despite GCC rapprochement: expert


Experts believe Qatar will not benefit from rejoining OPEC+.

Qatar will not rejoin OPEC (Organization of the Petroleum Exporting Countries) as it does not make sense for the country strategically, an expert told Doha News.

It is unlikely for the gas-rich Gulf state to undo its January 2019 to leave OPEC, which came as it faced a two-year blockade at the time, said Steven Wright, Associate Professor of International Relations and Associate Dean for Academic Affairs and Research at Hamad Bin Khalifa University. 

At the time, Qatar’s Energy Minister Saad Sheirda Al-Kaabi said the decision “reflects Qatar’s desire 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.”

On Tuesday, Saudi Arabia’s foreign minister announced full diplomatic relations between Qatar and its neighbouring Gulf states will be restored, ending the three year long blockade. 

Qatar’s Amir Tamim bin Hamad Al Thani and Saudi Crown Prince Mohammed bin Salman signed a declaration to end the Gulf dispute during a ceremony at the 41st GCC Summit hours earlier.

The Al-Ula declaration, signed in the presence of Gulf leaders and senior US advisor, Jared Kushner, ensured the end of the GCC crisis over a shared desire for unity within the bloc.

With the latest steps to reconcile in the region, questions have arisen as to whether Qatar will rejoin the intergovernmental organisation after experiencing autonomy for over a year. 

Uncertain future

While Qatar has been an important producer of oil, it has always remained marginal when it came to affairs with OPEC, and its focus on being a gas-based economy instead of oil means there are no clear advantages of re-joining the organisation. 

“In fact, not being a part of OPEC as an exporter of oil could be an advantage to the Qatari economy,” Wright told Doha News

Neighbouring Saudi Arabia recently announced plans to unilaterally cut production of oil by 1 million barrels in February and March, taking a lion’s share of the cuts. 

The move would draw the oil prices up amid announcements by Russia to increase its own oil production. The cuts are part of a deal to persuade most producers from OPEC and allies to hold output steady amid concerns that new coronavirus lockdowns will hit demand.

“However, OPEC’s survival as an intergovernmental body still hangs by a thread,” Wright added.  

With anti-cartel legislation on the agenda in the now Democrat-led Congress and Senate the US’ “No Oil Producing and Exporting Cartels Act 2019”, or Nopec bill, there is an anti-Saudi Arabia drive in Washington’s foreign policy. 

“If Nopec passes, there will be a significant shift in the dynamic of global energy markets and it will have significant impacts in terms of revenue for oil-producing countries such as Saudi Arabia and the United Arab Emirates,” Wright told Doha News

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