After nearly 60 years of membership in the premier oil bloc in the world, Qatar is set to pull out of OPEC(Organisation of Petroleum Exporting Countries). Qatar’s energy minister, Saad al-Kaabi said that the withdrawal from OPEC is for the country to focus more on gas production.

“Qatar has decided to withdraw its membership from OPEC effective January 2019 and this decision was communicated to OPEC this morning,” he said.

He also mentioned Qatar leaving OPEC is not as a result of any political or economic embargo placed on the country by Saudi Arabia, the largest OPEC member due to claims that Qatar was sponsoring terrorism in 2017. Qatar is one of the world’s largest exporter of liquefied natural gas but one of OPEC’s smallest oil producing country, therefore the decision of the country to fully focus on gas. Qatar wants to increase the production of liquefied natural gas from 77m to 110m tonnes a year.  The energy minister added that Qatar would still attend the OPEC meeting slated for Thursday in Vienna and join to set oil prices for next year.

The Gulf country also admitted that the decision to leave wasn’t an easy one to make considering it has been a member of OPEC for about 57 years but that the country made a little impact in oil production. Doha the capital of Qatar would continue to abide by its global oil commitments like any other non-OPEC country.

Al-Kaabi emphasized that this step was a “strategic decision”. “We will make a big splash in the oil and gas business soon,” he said. Qatar is planning to build the largest ethane cracker in the Middle East. Ethane crackers break gas down into ethylene, the main chemical used in plastics, resins, adhesives and synthetic products.  

This decision of Qatar to leave OPEC brings up a lot of talking points for the oil market as this means other members of the OPEC society need to produce more oil to meet up with the preset output. Qatar’s decision to focus solely on gas production also seems to emphasize the increasing diversification from oil-based economies in most of the world, to other forms of energy. It leaves behind OPEC members, like Nigeria and Angola, who as of yet, don’t have an alternative to oil.