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. Officials in Doha claim this is not behind their reason to leave OPEC, however, Minister of State for Energy Affairs Saad al-Kaabi made a less than veiled swipe at the boycotters during the announcement.
In a series of tweets on Monday, the Arab country said the exit is as a result of the decision to focus on gas production.
Qatar is OPEC's smallest oil producer with around 600,000 barrels per day (bpd) against the cartel's total output of roughly 33 million bpd. They've switched focus to liquid gas production, becoming the biggest reserve in the world for liquefied natural gas (LNG).
Qatar, OPEC's 11th-largest oil member by production, shocked market watchers on Monday with the announcement it would quit OPEC, adding additional bite to proceedings ahead of a meeting scheduled for Thursday in Vienna.
Saad al-Kaabi, chief executive of Qatar Petroleum, gestures as he speaks to reporters in Doha, Qatar, July 4, 2017.
Qatar was the first country to join OPEC's five founding members 57 years ago.
Walking away from OPEC's production controls could mean Qatar may increase output after leaving the group, undermining efforts to support prices.
There's also been a shift in the way energy exports are shared from Qatar.
Mr al-Kaabi dismissed any suggestion the decision was the result of the diplomatic spat between Qatar and many of its Gulf neighbours within OPEC over terrorism that has seen them impose travels bans on Doha and restrict trade. Once muscular enough to grind America to a halt with its 1970s oil embargo, OPEC needed non-members like Russian Federation to push through a production cut in 2016 after prices crashed below $30 a barrel.
US light crude oil rose $2.92 a barrel to a high of $53.85, up 5.7 percent, before easing slightly to around $53.50 by 0830 GMT.
Al-Kaabi, who is heading Qatar's OPEC delegation, said the decision was not political 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.
The Saudi-led axis accuses Doha of supporting terrorist groups in the region - allegations Qatar strenuously denies.
The low oil price benefits consumers in the U.S. as well as countries such as Turkey and Pakistan, which depend on imports to meet their energy needs.