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Qatar To Saudi Arabia:
We'd Rather Quit OPEC
Than Cut Ties With Iran
Or Close Al Jazeera

By Jim Krane

If Qatar’s fame were built on oil, few people would have heard of the tiny Persian Gulf monarchy, with just 300,000 citizens. Even fewer would care that the Arab sheikdom quit the OPEC cartel.
​
But Qatar’s fame is built upon its gargantuan supply of natural gas, not its dwindling oil reserves. Gas exports have helped Qatar create a big international profile by hosting sporting events including the upcoming 2022 World Cup, mediating regional conflicts, and especially by bankrolling the provocative Al Jazeera TV network. Now, Qatar’s natural gas wealth is enabling it to exit OPEC, and in the process, curry favor with the Trump administration.
Picture
Natural gas exports have allowed Qataris to become the world’s richest people. They’ve used that income to extract themselves from historic dominance by neighboring Saudi Arabia, OPEC’s de facto leader. Qatar’s quest for autonomy in the Gulf is crucial to understanding its withdrawal from OPEC, which is based on two important factors.         
​
First, Doha appears to have abandoned the cartel because of the long-running feud between Qatar and neighboring countries, led by OPEC mainstays the United Arab Emirates and Saudi Arabia. Over the years, the Saudis have tried to bring wayward Qatar to heel. In 1996, Riyadh backed a failed coup attempt. Since June 2017, Riyadh joined the UAE in imposing a trade and travel blockade on the maverick monarchy. The embargo has failed to achieve a single one of its strategic goals, which include cutting links with Iran, the country with which Qatar shares its primary natural gas field, and shutting down Al Jazeera.
At one time or another, Al Jazeera has lampooned every Arab leader, including the Saudi royal family, making the network a nuisance to ruling elites used to uncritical coverage – with one exception: Al Jazeera reporters are subject to prosecution for treating Qatari elites with the same withering eye. Not surprisingly, the neighbors are unamused.  Meanwhile, the Trump administration, after initially sympathizing with the blockade of Qatar, is now asking Riyadh and Abu Dhabi to back down. Qatar’s latest move appears calculated to persuade Trump to push harder.           
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The second driver of the Qatari departure is the fact that OPEC itself is changing in ways that have sidelined small oil producers like Qatar. That’s because the shale revolution that turned the United States into the world No. 1 oil producer has diluted OPEC’s market power. The cartel now finds itself with too little clout to move oil prices unless Russia cooperates. Small states like Qatar, which produces just 600,000 barrels of oil per day – less than half of the output of the Eagle Ford shale play – no longer matter.                
“OPEC … has become useless and does not bring us anything,” said Qatar’s former Prime Minister Hamad bin Jassim al-Thani. “It is just being used for purposes that harm our national interest.”
Picture
Tweet by former Qatari prime minister Hamad bin Jassim al-Thani Dec. 3, 2018(JK)
But quitting OPEC could actually backfire on Doha. It could expose Qatar to accusations of “free riding” on output cuts by members, especially those of Saudi Arabia, which almost always carries the heaviest load. Given that possibility, Qatar might agree to voluntary cuts in line with OPEC, to demonstrate that its departure has little to do with an unwillingness to accept its share of the burden. 
 
Finally, leaving OPEC is a contrarian move for a small country, and one that signals a high level of self-confidence. Most small states seek to join international organizations as a way to increase their geopolitical reach. OPEC allows little-heard leaders from members like Gabon, Equatorial Guinea and Ecuador to share the stage. 

Qatar’s departure shows that the tiny monarchy no longer needs OPEC to make itself heard. For that, it’s got Al Jazeera.

​
Jim Krane is the Wallace S. Wilson Fellow for Energy Studies at Rice University’s Baker Institute For Public Policy.
This article originally appeared through the Baker Institute at Rice.
Follow Jim on Twitter: @jimkrane
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  • Members Login >>
    • Energy Today Archive >
      • Leading Change
      • Zero Emissions
      • Interactive Map
      • Floating Wind
      • Quick Hits
      • Steven Chu
      • Dan Poneman
      • Melanie Kenderdine
      • Chris Gould
      • UNSDSN
      • Data as a Tool
      • Change Through Organizing
      • MK Dorsey
      • Social Impact Start-Ups
      • Social Impact Entrepreneurs
      • A Network for the Heartland
      • Ecosystem Maps
      • Clean Energy By 2035
      • Bioremediation
      • Energy Storage-Video
      • Geothermal Energy
      • Commodity Chemical
      • PM Careers In Cleantech
      • Critical Breakthroughs
      • Losing Our Way
      • The Third Rail
      • Mapping the Seas
      • Low-Carbon Midwest
      • Smart Grid
      • Decarbonization
      • Getting to Zero
      • Climate Risk and Response
      • Our Infrastructure Is Being Built For a Climate That's Already Gone
      • Energy History
      • Battery Recycling
      • Quantum Waves
      • Coal REE
      • Fueling Big Rigs
      • Sandia Initiatives
      • Natural Gas Revolution
      • Duck Chart
      • Carbon Crossroads
      • Electric Cars
      • Energy Jobs Coalition
      • Indispensable Electricity
      • Post-Pandemic Predictions
      • Building Infrastructure
      • De-Prioritizing Cars
      • Vicki Hollub
      • Emily Kirsch
      • Lise Meitner
      • Lets Listen
      • COVID-19 and China Air
      • COVID-19 and Oil
      • COVID-19 and Solar
      • COVID-19 and Storage
      • Immorality of Waste
      • Rethinking "Disposable"
      • Second Life of Wind Turbines
      • Rare Earth Elements
      • Coal: Ashes to REM
      • Platinum and Cobalt
      • Geoengineering the Planet
      • An Atmospheric Industry
      • L.A. Hydrogen Plant
      • Pebbles, Sponges and Fans
      • CO2 Into Fuel
      • Superpower
      • The Fate of Food
      • Power Trip
      • Signs on the Earth
      • The Dreamt Land
      • Double Jeopardy
      • 7 Trends In Mineral Mining
      • The Prize - an excerpt
      • REM From Coal
      • The Deep Sea - The Next Gold Rush
      • Geothermal - Salvation or Earthquakes
      • The Myth of the Sustainabie City
      • The Emerging Circular Economy
      • How Cities Can Become More Resilient
      • Prosperity for One, Disaster for Another
      • The Real Energy Revolution
      • Carbon Loophole
      • Op-Ed: CO2 Reduction Thru Biofuels
      • The Sun Also Accelerates
      • Blowing Past the Zettabyte Era
      • Jack Voltaic: A Cyber Simulation Wargame
      • Managing Risk
      • From Russia, With Love
      • Ukraine: The Cyber-War Test Bed
      • 5G Requires A New Approach
      • Climate Change or Just Weather
      • Gone
      • Surge Flooding - Houston
      • Tug of War: Pollution Masks Impact of Climate Change
      • Climate Change Needs the Humanities
      • Nuclear Power: A Dilemma for Climate Change Philanthropy
      • Did California Trump the Clean Air Rollback
      • A Redundancy Dilemma
      • Double Jeopardy - a bonus excerpt
      • The War of the Currents
      • There Will Be Buyouts
      • Space Research Can Save the Planet
      • California's Oil Hypocrisy
      • Robert Merton
      • Africa: The New O&G Frontier
      • Why Oil Markets Aren't Reacting
      • Capitalism and Climate Change
      • The Frackers
      • Double Jeopardy
      • The Grid
      • Designing Climate Solutions
      • Making Tech Miracles
      • Best In Snow
      • Plastic Do-Over
      • The New Nuclear
      • Global Energy Insecurity
      • Renewable Energy and Geopolitics
      • The Myth of Energy Security
      • Residential Storage Security
      • An Insecure GND
      • Water, Food and Energy Security
      • The Transformation of the O&G Sector
      • Wild Fire
      • Ocean Pollution At High-Tide
      • CC's Fuzzy Math
      • A Climate Casualty of a Different Kind
      • Plants Store CO2 Too
      • 45Q for CarbonTech
      • CC's Potential Pitfalls
      • Klaus’s wacky idea
      • Permitting Geological Sequestration
      • A New Era of Energy Innovation
      • Investment in O&G Set to Soar
      • Old Capital Strategies, New Thinking
      • BofA Builds Green Revolution
      • We'd Rather Quit OPEC...
      • One Belt, One Road, No Plan
      • Coal fight turns ugly
      • As the World Warms
      • Oil Diplomacy
      • George Mitchell
      • Nicole Poindexter
      • Dan Kammen
      • Regina Mayor
      • Jessica Matthews
      • Bonus: Refining Reducing
      • Bonus: Energy Investment Trends
      • Bonus: The US has lost the rare earths
      • Bonus: Fossil-tech survey results
      • Bonus article: The New Age of Electricity
      • Bonus - Plan B: Geoengineering
      • Bonus: EXECUTIVE SUMMARY - Fossil-Tech
      • Bonus: Cyber Attack Timeline
      • Bonus: Employees - Cyber Threats and Assets
      • Bonus: Transportation, Jetson's Style
      • Bonus Article for Members
      • Bonus article - Infrastructure Failure
      • Bonus: Hydrogen Fuel From Coal
      • Bonus: Cities Not Meeting Targets
      • Bonus: Carbon Sequestering Fungi
      • Bonus: The Earthshot Prize
      • Bonus: A Radioactive Discovery