Petrol Prices: How Qatar's decision to leave OPEC may affect South Africa

Qatar pulls out of Opec oil producers' cartel

Qatar has announced its decision to leave the Organization of the Petroleum Exporting Countries (OPEC) from January next year and focus more on the production of natural gas.

The tiny, energy-rich Arab nation of Qatar announced on Monday it will withdraw from OPEC in January, meeting its aspirations to increase production outside of the cartel's constraints and slighting the Saudis who are now boycotting Doha.

Oil prices soared around 5 per cent on Monday after the United States and China agreed to a 90-day truce in their trade war, and ahead of a meeting this week by producer club OPEC that is expected to result in a supply cut.

Qatar refutes the allegations and claims rivals want to overthrow its government.

The surprising move by Qatar may spur country's like Nigeria, ninth largest exporter, to value their gas more and define a set of finance terms aimed at getting extra value from the natural resource.

Tensions have been mounting in the region in which Saudi Arabia imposed a boycott in June 2017 over claims that Doha supported terrorism, which Doha denied.

Qatar produces only some 600,000 barrels of crude oil a day, making it OPEC's 11th biggest producer.

Qatar pulls out of Opec oil producers' cartel

It is also deepens the rift between Qatar and Saudi Arabia, Opec's de facto leader, after Saudi diplomatic crackdown on its neighbour last summer.

"This organization has become useless and adds nothing to us", Sheikh Hamad wrote on Twitter.

Qatar is OPEC's 11th-biggest oil producer, accounting for less than 2 per cent of total output, so its departure may not have a significant impact on discussions this week to cut production in conjunction with allies including Russian Federation.

"Our potential is gas", al-Kaabi said.

Just two months ago, brent crude, the global benchmark for oil prices, hit its highest mark in four years, touching $86 per barrel.

These countries, which also include large economies such as China and India, account for 75 percent of Iran's energy export.

"Quitting OPEC is largely symbolic for Qatar", he told Bloomberg. A Saudi-led coalition implemented a blockade on Qatar in June past year, severing diplomatic, trade and transport links based on accusations that stemmed from its funding of extremist groups and relations with Iran. He clarified that the decision not related to the blockade of Qatar by OPEC countries Saudi Arabia, the United Arab Emirates (UAE) and their non-OPEC allies Egypt and Bahrain. The announcement was made by the Gulf state's new energy minister, Saad al-Kaabi, on Monday.

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