Monday, December 3, 2018

Qatar initiates an OPEC 'Brexit' as they will leave the cartel at beginning of 2019

With a new report out showing that 40% of the world's energy production is now controlled by just three countries (with two of them not even part of OPEC), the power and authority once held by the Middle Eastern cartel appears to be waning fast.  And in response to this, and the dying Petrodollar agreement, Qatar announced on Dec. 3 that they will officially be leaving OPEC at the beginning of next year.

Qatar leaving the Organization of the Petroleum Exporting Countries (OPEC) is largely a symbolic step, expert tells RT, as the Gulf state is a marginal player in the oil trade. But they say repercussions will be felt in Riyadh. 
While the move is merely symbolic for Qatar, a founding member quitting OPEC after 57 years cannot look positive for the organization, John Hall, chairman of Alfa Energy, a UK-based consulting company said in an interview with RT. 
“They are making their point,” the expert said, stressing Doha was driven by Saudi Arabia and the Saudi-led blockade. “It will hit [the] credibility of the OPEC, as well as it will hit Saudi Arabia as the de-facto leader of the OPEC.” - Russia Today
While Qatar is certainly not a heavyweight in OPEC, it is a charter member who's significance in the region cannot be understated.  And with their largest natural gas facilities being tied to Iran in a joint partnership, they cannot afford to be sanctioned or coerced by the Saudi's, especially since the U.S. has instigated a return of sanctions on Iran.

Indeed, it is fairly apparent that Qatar has been in the process of disconnecting itself from OPEC for some time, especially since they have already begun to accept Chinese Yuan and Euros as trade payment in the past year at the expense of the Petrodollar.  And with the likelihood of Saudi Arabia losing more and more of its authority in the region thanks to Russia's growing market share and the escalation of U.S. production, OPEC's days are surely numbered and as with any breakup, those who exit the door first usually end up with the least amount of pain.


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