Qatar announced plans to quit OPEC from January, just days before the cartel's Vienna meeting set for December 6.
Speaking at a news conference, Qatar's Energy Minister Saad al-Kaabi said Doha -one of OPEC’s smallest oil producers but the world’s biggest liquefied natural gas (LNG) exporter- would withdraw from the oil exporter group on January 1, 2019, ending a 57-year-old membership.
"Qatar has decided to withdraw its membership from OPEC effective January 2019 and this decision was communicated to OPEC this morning," Reuters quoted the minister as saying. "For me to put efforts and resources and time in an organisation that we are a very small player in and I don't have a say in what happens ... practically it does not work, so for us it's better to focus on our big growth potential," he added.
Al-Kaabi, who is heading Qatar's OPEC delegation, also said the decision was not linked to the 18-month political and economic boycott of Doha but related to the country's long-term strategy and plans to develop its gas industry and increase LNG output to 110 million tonnes by 2024.
Since June 2017,OPEC members, Saudi Arabia and the United Arab Emirates, and fellow Arab states Bahrain and Egypt have imposed a political and economic boycott on Qatar, accusing the country of supporting terrorism. Qatar denies the claims, saying the boycott hampers its national sovereignty.
"A lot of people will politicise it," the news agency quoted Al-Kaabi as saying. "I assure you this purely was a decision on what's right for Qatar long term. It's a strategy decision."
Qatar with crude oil output of around 600,000 barrels per day has been an official OPEC member since 1961, one year after the organisation's establishment.
Here's how analysts reacted to the news of the emirate’s withdrawal.
“Qatar leaving Opec isn’t great news for the oil market and the market participants haven’t digested the full impact of this news. Basically, Qataris have brought the biggest weapon out and it only means more instability between the Qatari and Saudi relationship” Naeem Aslam, an analyst at online broker ThinkMarkets, told The Guardian.
Qatar’s withdrawal “doesn’t affect OPEC’s ability to influence as Qatar was a very small player” Amrita Sen, chief oil analyst at consultancy Energy Aspects, told Reuters.
"The decision by Qatar to withdraw from OPEC does come as a surprise, but is unlikely to have a significant impact on the oil market," Peter Kiernan, lead energy analyst at the Economist Intelligence Unit, told CNBC.
Oil prices surged more than 5 percent on Monday after the United States and China agreed to a temporary truce on trade during the G20 summit in Argentina but Brent crude is still trading at around $62 a barrel, well off October's peak of more than $86.