12-03-2018, 11:44 PM
*** 4-Dec-18 World View -- Qatar withdraws from Saudi Arabia-led OPEC
This morning's key headlines from GenerationalDynamics.com
****
**** Qatar withdraws from Saudi Arabia-led OPEC
****
![[Image: g181203b.jpg]](http://Media.GenerationalDynamics.com/ww2010/g181203b.jpg)
Qatar will pull out of OPEC and concentrate on liquefied natural gas (LNG)
Qatar announced that on January 1 it would withdraw from the
Organization of Petroleum Exporting Countries (OPEC).
OPEC was founded in September 1960 with five founding members: Iran,
Iraq, Kuwait, Saudi Arabia and Venezuela. Qatar joined in 1961. It
consisted of the countries of the world that produced most of the oil,
and so it was a cartel that, to some extent, was able to control total
global oil supplies, and thereby control prices. As of 2016, the
additional members are: Indonesia, Libya, the United Arab Emirates,
Algeria, Nigeria, Ecuador, Gabon and Angola.
Most Americans had never heard of OPEC and weren't aware of its
existence until October, 1973, when they were shocked by OPEC's
announcement of an international oil embargo, triggered by US support
for Israel in the Yom Kippur war against Egypt. This caused the
gasoline (petrol) shortages in the United States, resulting in long
lines at gas stations, and a surge in gas prices from about 30 cents
per gallon to (horrors!) a dollar a gallon or more.
Qatar is the first Gulf country to withdraw from OPEC. It won't have
much effect on the cartel, since Qatar provides only 2% of the
cartel's oil. This meant that Qatar really had little influence of
OPEC anyway. In fact, the cartel has evolved over the years, to the
point where the decision makers are Saudi Arabia and Russia, the
latter not even being a member of OPEC. Furthermore, it retains just
a fraction of its previous ability to set oil prices, since the United
States has for years been flooding the market with oil obtained from
fracking.
So the withdrawal of Qatar from OPEC has little more than symbolic
value. However, it is an embarrassment, since a major OPEC meeting is
scheduled to be held next week.
The reason that Qatar gave for its withdrawal from OPEC is that it
wants to concentrate more on liquefied natural gas (LNG). Although
Qatar is a relatively small supplier of oil, it's the world's biggest
LNG supplier, producing almost 30% of the world's total.
According to Qatar's energy minister Saad Sherida al-Kaabi,
<QUOTE>"The withdrawal decision reflects Qatar's desire to
focus its efforts on plans to develop and increase its natural gas
production from 77 million tonnes per year to 110 million tonnes
in the coming years. ...
We are a small player in OPEC, and I'm a businessman, it doesn't
make sense for me to focus on things that are not our strength,
and gas is our strength so that is why we've made this
decision."<END QUOTE>
However, many observers believe that the reasons are deeper than just
pure business. Reuters and Investopedia and History.com and Gulf Times (Qatar) and The National (UAE)
****
**** The split deepens between Saudi Arabia and Qatar
****
Although Qatar's al-Kaabi says that the withdrawal is purely a
business decision, it's certainly tied into the increasingly toxic
geopolitical situation in the Gulf.
Recall that in June of last year, several Arab states, including Saudi
Arabia, Bahrain, Egypt and United Arab Emirates (UAE), broke relations
with Qatar and imposed an air, sea and land blockade on Qatar.
Amazingly enough, that blockade is
still in place. The core of the disagreement is apparently related to
Arab tribal differences that go back to World War I and the collapse
of the Ottoman Empire.
Shortly after imposing the blockade, Saudi Arabia produced a list of 13 demands
that would
have to be met to end the blockade. Included were demands to stop
supporting terrorism, to sever ties with Iran, Turkey and the Muslim
Brotherhood, and to shut down Al-Jazeera.
Today it seems that all the Saudi demands have backfired, especially
after the October 2 gruesome murder of Jamal Khashoggi in the Saudi embassy in Istanbul, Turkey.
Turkey's president Recep Tayyip Erdogan sees the Khashoggi murder as
an opportunity to turn the screws on Saudi Crown Prince Mohammed bin
Salman (MBS) by gradually leaking out pieces of evidence about the
murder a bit at a time. MBS was probably responsible for ordering the
murder, but wants to claim that he knew nothing. Erdogan keeps
pulling MBS in by releasing evidence that points to him.
Qatar-based al-Jazeera is also playing a major part in this. While
other international news organizations have reduced their coverage of
the Khashoggi murder as time has passed, al-Jazeera continues to
devote a significant portion of each newscast to the latest on the
murder, inviting one expert after another to opine on MBS's
relationship to the crime.
Qatar shares the world's largest LNG field with Iran, so the two
countries have to cooperate. Furthermore, in a 60 Minutes interview
last year, Qatar Emir Sheikh Tamim bin Hamad Al Thani said the
following:
<QUOTE>"Iran is our neighbor. And by the way, us as a
country, we have lots of differences and foreign policies with
Iran, more than them. But let me tell you one thing Charlie; When
those countries, our brothers, blocked everything. Blocked
medicine, blocked food, the only way for us to provide food and
medicine for our people was through Iran. And when they talk about
terrorism, absolutely not. We do not support
terrorism."<END QUOTE>
Turkey also helped Qatar get through the blockade. So if MBS's
intention with the blockade was to force Qatar to sever relations with
Iran and Turkey, it seems to have accomplished the opposite.
Qatar, Iran and Turkey have been forced into a fellowship by the Saudi
blockade. However those three countries are strange bedfellows, with
not a lot in common and significant historical differences, so the
fellowship may not survive once the blockade ends. Washington Post and Al-Jazeera (Qatar) and CBS News
Related Articles
KEYS: Generational Dynamics, Qatar, Saudi Arabia,
Organization of Petroleum Exporting Countries, OPEC,
Israel, Egypt, Russia, Bahrain, Egypt, United Arab Emirates, UAE,
Saad Sherida al-Kaabi, al-Jazeera, Jamal Khashoggi,
Mohammed bin Salman, MBS, Turkey, Recep Tayyip Erdogan,
Tamim bin Hamad Al Thani
Permanent web link to this article
Receive daily World View columns by e-mail
Contribute to Generational Dynamics via PayPal
John J. Xenakis
100 Memorial Drive Apt 8-13A
Cambridge, MA 02142
Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
Subscribe to World View: http://generationaldynamics.com/subscribe
This morning's key headlines from GenerationalDynamics.com
- Qatar withdraws from Saudi Arabia-led OPEC
- The split deepens between Saudi Arabia and Qatar
****
**** Qatar withdraws from Saudi Arabia-led OPEC
****
Qatar will pull out of OPEC and concentrate on liquefied natural gas (LNG)
Qatar announced that on January 1 it would withdraw from the
Organization of Petroleum Exporting Countries (OPEC).
OPEC was founded in September 1960 with five founding members: Iran,
Iraq, Kuwait, Saudi Arabia and Venezuela. Qatar joined in 1961. It
consisted of the countries of the world that produced most of the oil,
and so it was a cartel that, to some extent, was able to control total
global oil supplies, and thereby control prices. As of 2016, the
additional members are: Indonesia, Libya, the United Arab Emirates,
Algeria, Nigeria, Ecuador, Gabon and Angola.
Most Americans had never heard of OPEC and weren't aware of its
existence until October, 1973, when they were shocked by OPEC's
announcement of an international oil embargo, triggered by US support
for Israel in the Yom Kippur war against Egypt. This caused the
gasoline (petrol) shortages in the United States, resulting in long
lines at gas stations, and a surge in gas prices from about 30 cents
per gallon to (horrors!) a dollar a gallon or more.
Qatar is the first Gulf country to withdraw from OPEC. It won't have
much effect on the cartel, since Qatar provides only 2% of the
cartel's oil. This meant that Qatar really had little influence of
OPEC anyway. In fact, the cartel has evolved over the years, to the
point where the decision makers are Saudi Arabia and Russia, the
latter not even being a member of OPEC. Furthermore, it retains just
a fraction of its previous ability to set oil prices, since the United
States has for years been flooding the market with oil obtained from
fracking.
So the withdrawal of Qatar from OPEC has little more than symbolic
value. However, it is an embarrassment, since a major OPEC meeting is
scheduled to be held next week.
The reason that Qatar gave for its withdrawal from OPEC is that it
wants to concentrate more on liquefied natural gas (LNG). Although
Qatar is a relatively small supplier of oil, it's the world's biggest
LNG supplier, producing almost 30% of the world's total.
According to Qatar's energy minister Saad Sherida al-Kaabi,
<QUOTE>"The withdrawal decision reflects Qatar's desire to
focus its efforts on plans to develop and increase its natural gas
production from 77 million tonnes per year to 110 million tonnes
in the coming years. ...
We are a small player in OPEC, and I'm a businessman, it doesn't
make sense for me to focus on things that are not our strength,
and gas is our strength so that is why we've made this
decision."<END QUOTE>
However, many observers believe that the reasons are deeper than just
pure business. Reuters and Investopedia and History.com and Gulf Times (Qatar) and The National (UAE)
****
**** The split deepens between Saudi Arabia and Qatar
****
Although Qatar's al-Kaabi says that the withdrawal is purely a
business decision, it's certainly tied into the increasingly toxic
geopolitical situation in the Gulf.
Recall that in June of last year, several Arab states, including Saudi
Arabia, Bahrain, Egypt and United Arab Emirates (UAE), broke relations
with Qatar and imposed an air, sea and land blockade on Qatar.
Amazingly enough, that blockade is
still in place. The core of the disagreement is apparently related to
Arab tribal differences that go back to World War I and the collapse
of the Ottoman Empire.
Shortly after imposing the blockade, Saudi Arabia produced a list of 13 demands
that would
have to be met to end the blockade. Included were demands to stop
supporting terrorism, to sever ties with Iran, Turkey and the Muslim
Brotherhood, and to shut down Al-Jazeera.
Today it seems that all the Saudi demands have backfired, especially
after the October 2 gruesome murder of Jamal Khashoggi in the Saudi embassy in Istanbul, Turkey.
Turkey's president Recep Tayyip Erdogan sees the Khashoggi murder as
an opportunity to turn the screws on Saudi Crown Prince Mohammed bin
Salman (MBS) by gradually leaking out pieces of evidence about the
murder a bit at a time. MBS was probably responsible for ordering the
murder, but wants to claim that he knew nothing. Erdogan keeps
pulling MBS in by releasing evidence that points to him.
Qatar-based al-Jazeera is also playing a major part in this. While
other international news organizations have reduced their coverage of
the Khashoggi murder as time has passed, al-Jazeera continues to
devote a significant portion of each newscast to the latest on the
murder, inviting one expert after another to opine on MBS's
relationship to the crime.
Qatar shares the world's largest LNG field with Iran, so the two
countries have to cooperate. Furthermore, in a 60 Minutes interview
last year, Qatar Emir Sheikh Tamim bin Hamad Al Thani said the
following:
<QUOTE>"Iran is our neighbor. And by the way, us as a
country, we have lots of differences and foreign policies with
Iran, more than them. But let me tell you one thing Charlie; When
those countries, our brothers, blocked everything. Blocked
medicine, blocked food, the only way for us to provide food and
medicine for our people was through Iran. And when they talk about
terrorism, absolutely not. We do not support
terrorism."<END QUOTE>
Turkey also helped Qatar get through the blockade. So if MBS's
intention with the blockade was to force Qatar to sever relations with
Iran and Turkey, it seems to have accomplished the opposite.
Qatar, Iran and Turkey have been forced into a fellowship by the Saudi
blockade. However those three countries are strange bedfellows, with
not a lot in common and significant historical differences, so the
fellowship may not survive once the blockade ends. Washington Post and Al-Jazeera (Qatar) and CBS News
Related Articles
- Saudi Arabia tries to recover from Khashoggi disappearance disaster (15-Oct-2018)
- Al-Jazeera may be at the center of the Gulf crisis with Qatar (25-Jun-2017)
- Qatar-Arab crisis is unlikely to be resolved soon (13-Jun-2017)
- Saudi Arabia and other Arab nations cut ties with Qatar in new Mideast crisis (06-Jun-2017)
- Gulf Arab states have major split over Egypt and Iran (06-Mar-2014)
- Arab League holds annual meeting among bitter splits (26-Mar-2014)
KEYS: Generational Dynamics, Qatar, Saudi Arabia,
Organization of Petroleum Exporting Countries, OPEC,
Israel, Egypt, Russia, Bahrain, Egypt, United Arab Emirates, UAE,
Saad Sherida al-Kaabi, al-Jazeera, Jamal Khashoggi,
Mohammed bin Salman, MBS, Turkey, Recep Tayyip Erdogan,
Tamim bin Hamad Al Thani
Permanent web link to this article
Receive daily World View columns by e-mail
Contribute to Generational Dynamics via PayPal
John J. Xenakis
100 Memorial Drive Apt 8-13A
Cambridge, MA 02142
Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
Subscribe to World View: http://generationaldynamics.com/subscribe
