Oil shock: Qatar pulls out of OPEC

Oil shock: Qatar pulls out of OPEC

OPEC and Russian Federation, who together produce about 40 percent of the world's oil, said earlier this week they agreed on new oil production cuts to ensure oil price does not drop too much in the coming months.

Qatar has announced that it will leave OPEC next month.

Minister of state for energy affairs Saad al-Kaabi told a news conference that Qatar, which he said been a member of Opec for 57 years, would still attend the group's meeting on Thursday and Friday this week, and would abide by its commitments.

The tiny, energy-rich Arab nation of Qatar announced on Monday it would withdraw from OPEC, mixing its aspirations to increase production outside of the cartel's constraints with the politics of slighting the Saudi-dominated group amid the kingdom's boycott of Doha.

He also said Qatar wants to raise its oil production from 4.8 million barrels of oil equivalent a day to 6.5 million barrels.

The Arab country will quit Opec by January 2019, the minister, Saad al-Kaabi said.

Al-Kaabi said that Qatar made a decision to pull out this calendar year as to not be an OPEC member in 2019.

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"The withdrawal decision reflects Qatar's desire to focus its efforts on plans to develop and increase its natural gas production from 77 million tons per year to 110 million tons in the coming years", the minister said. "If you aren't on board with a tough decision like to reduce, and Qatar was never in that position since it is a relatively small producer", she said, then you have no sway.

Quicktake: Why are oil prices plunging?

Qatar joined OPEC in 1961, one year after the organisation's establishment.

"For now, there is optimism that Saudi Arabia and Russian Federation are committed to keep the supply under control".

Qatar is the world's biggest exporter of liquid natural gas.

The withdrawal comes as other non-Opec countries such as Russian Federation have gained more clout alongside Saudi Arabia in setting oil policy.

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