Qatar announced in December 2018 that it would be renouncing its membership from the Organization of the Petroleum Exporting Countries (OPEC) in order to focus more on its exports of natural gas. This move has made Qatar the first Arab country to exit OPEC since the organization’s founding in 1960. The move comes at a time of unyielding tension between Qatar and fellow OPEC member Saudi Arabia, and also suggests a deeper shift in Qatar's plans for the future geopolitical landscape.
Qatar has been a member of OPEC since 1961. The organization, formed in 1960 in order to stabilize oil markets and co-ordinate petroleum policy among its members, has in the decades since played a key role in setting the price of oil and influencing oil markets. In recent years however, political rivalries and efforts by the United States to sanction Russia and Iran have had much more impact on the price of oil than the organization. The development of US domestic oil and gas reserves has also diminished OPEC’s market influence. In response to this, Saudi Arabia and Russia have started co-operating much more closely on managing the world supply of oil in order to influence prices. This co-operation has had some success, but it has also been viewed as an indicator of a decline in OPEC’s soft power capabilities. Qatar’s departure will further strengthen this perception.
It cannot be ruled out that the perception of OPEC’s declining influence offers Qatar latitude to feel that it would be justified in exiting the bloc. Another factor influencing this decision was the strained relationship between Qatar and Saudi Arabia, one of the most important and influential members of OPEC. Relations between Qatar and Saudi Arabia were effectively severed in 2017, when Saudi Arabia accused Qatar of providing support for terrorism in violation of a 2014 Gulf Cooperation Council (GCC) agreement. Saudi Arabia then cut off diplomatic relations, closed the border with Qatar, and refused access to Qatari ships and aircraft. Saudi Arabia even began investigating plans to turn Qatar into an island by building a canal along the border. It is clear that the intensity of this schism was of sufficient magnitude to be a contributing factor as to Qatar’s departure from OPEC.
Qatar’s rift with Saudi Arabia is serious enough that Qatar can no longer trust that the other GCC countries will act to provide for its future security. This distrust is merited, given that some accounts allege that by the summer of 2017, Saudi Arabia and the UAE had drawn up plans for an invasion of Qatar. Such an attack would have been a nightmare scenario for Qatar, a country with the world’s third largest proven reserves of natural gas, a $335 billion USD Sovereign Wealth Fund, and very little strategic depth. While it would normally be unthinkable for any country, especially a US ally, to attack any nation hosting US military assets (as Qatar does), the fact that such an invasion would even be planned highlights the increasing precariousness of Qatar’s security position.
Qatar’s moves must be observed in light of this situation. In conjunction with departing OPEC, Qatar will also seek to increase its natural gas production from 77 million tons a year to 110 million tons. This increase indicates Qatar understands that natural gas is a key tool in its arsenal for buying the goodwill necessary for the country’s future security. In tandem with this increase, we should expect to see Qatar attempt to deepen relationships with countries willing to purchase natural gas. Qatar will also likely work to strengthen its relationship with the US. Though the US has no need of Qatari gas as the result of its own natural gas boom, Qatar could offer cooperation on issues such as counterterrorism and countering Iran. Qatar observers should watch for these actions as Qatar navigates its post-OPEC future.
