Tyler O’Neil:
“…The small island nation of Qatar is pulling out of the international oil cartel OPEC. Qatar is the 11th largest oil producing country in OPEC, but this is still huge news. Bloomberg’s team (Walid Ahmed, Dan Murtaugh, and Javier Blas) break the news:
Qatar said it will leave OPEC next month, a rare example of the toxic politics of the Middle East rupturing a group that had held together for decades through war and sanctions.
Qatar, a member since 1961, is leaving to focus on its liquefied natural gas production, Energy Minister Saad Sherida Al-Kaabi told a news conference in Doha on Monday. He didn’t mention the political backdrop to the decision: dire relations with Saudi Arabia, which has led a blockade against his country since 2017; and a rhetorical onslaught from U.S. President Donald Trump against the cartel.
The Middle East has been plagued with serious problems in previous decades, and Qatar stuck with OPEC.
Even through extreme events like the Iran-Iraq war in the 1980s or Saddam Hussein’s 1991 invasion of Kuwait, producers still saw the benefits of retaining their membership and cooperating on oil policy.
Qatar’s departure in far less severe circumstances is testament to the declining influence of OPEC in its historical form. Since non-members started cooperating with the group in 2016, direct talks between Russia and Saudi Arabia often bypass the cartel’s traditional decision-making process. The surge in North American oil production has also shifted the balance of power away from the Middle East.
Why is OPEC less powerful? Perhaps it has something to do with the United States’ booming oil production…”
https://pjmedia.com/blog/liveblogevent/live-blog-135/entry-247162/