Qatar Wants Out of OPEC. What Will That Mean at the Pump?

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Announcing the decision this morning, Saad al-Kaabi, the Qatari energy minister, said: "We don't have great potential [in oil], we are very realistic". Analysts in the New York Times said that there was little apparent reason for Qatar's natural gas activities to conflict with its membership in OPEC.

According to OPEC's data, Qatar's production is less than 2 percent of OPEC's total production, which is estimated at more than 33 million barrels per day.

Qatar produces only some 600,000 barrels of crude oil a day, making it OPEC's 11th biggest producer. They also launched an economic boycott, stopping Qatar Airways flights from using their airspace, closing the country's sole land border with Saudi Arabia and blocking its ships from using their ports.

There was no immediate comment from Vienna-based Organization of Petroleum Exporting Countries, which is to meet this month and discuss possible production cuts.

Saudi Arabia with the support of the UAE, Egypt and Bahrain imposed a trade and travel embargo, accusing Qatar of financing terrorism and interfering in the internal affairs of other states.

It announced the decision at a press conference Monday, just days ahead of a crucial meeting on Thursday.

Describing reactions to the decision in the business world, Kenyon reports that prices jumped in early trading Monday, with analysts citing hopes for easing trade tensions between the USA and China, along with Qatar's withdrawal from OPEC.

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

Delegates at OPEC, which has 15 members including Qatar, sought to play down the impact. Europe and Asia stock markets were boosted by the news and oil prices were also positively impacted today.

While there was no announcement on how much would be cut and for how long, the pact between the world's two biggest crude exporters was cheered Monday by oil traders, with Brent jumping $2.60 to $62.06 and West Texas Intermediate up $2.42 to $53.35.

"For now, there is optimism that Saudi Arabia and Russian Federation are committed to keep the supply under control".

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.

Norbert Rücker, head of commodity research at Swiss bank Julius Baer, said: "From Argentina to Alberta, the oil market news is about supply curtailments". In the year to September 2018, the USA only imported an average of 543,000 barrels per day of crude oil and other petroleum products.

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