Qatar’s decision to leave OPEC next month is unlikely to have a major impact on the entity’s ability to manage the oil market, according to a new report from Fitch Solutions.
In the report, Fitch noted that Qatar is among the smallest oil producers in OPEC, with production averaging slightly about 600,000 barrels per day as of October, compared to 32 million from the rest of the OPEC producers.
“We estimate that Qatar’s move…will not decisively affect OPEC’s ability to influence the oil market as Qatar represented a very small player within the cartel,” the report said.
“We therefore do not expect it to affect the group’s ability to enact coordinated oil production cuts.”
However, the report said that the consequences for OPEC may be “reputational” if Qatar’s withdrawal leads to other small producers leaving as well.
Qatar has said it will still participate in the upcoming OPEC meeting in December, where it is expected to announce coordinated production cuts to support lowering oil prices.
“We do not expect Qatar’s withdrawal to affect the outcome of the meeting, but we anticipate that it will further distance the country politically from its GCC neighbours,” the Fitch report said.
Other analysts agreed that the move will have only a limited impact on the global market.
“Quitting OPEC is largely symbolic for Qatar,” Energy Aspects chief oil analyst Amrita Sen told AFP. “Its oil production has been steady with limited prospects for increases.”
On Monday, the UAE Minister of State for Foreign Affairs Dr. Anwar Gargash said that Qatar would be further “isolating itself” by withdrawing from OPEC.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.