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Why Qatar left OPEC

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06.12.2018

Qatar's decision to end its nearly 60-year-old membership in OPEC caught many observers by surprise earlier this week.

Explaining the motivation behind the decision, Saad Sherida al-Kaabi, Qatar's minister of state for energy affairs and president and CEO of Qatar Petroleum, said that Qatar's exit from OPEC "is not political, it was purely a business decision for Qatar's future strategy towards the energy sector."

Given that the decision was taken in the context of the ongoing Saudi-led blockade on Qatar, many commentators interpreted it as a political act and a rebuke of an organisation increasingly seen as a tool of Saudi power projection.

This assessment is too simplistic and does not reflect Qatar's long-term economic strategy. What defines the country's energy sector is not its oil production, but its capacity and global presence in the natural gas sector. Qatar's exit from OPEC should be seen through the lens of its long-term economic vision and its divergence from the oil cartel's business trajectory.

Qatar began to strategically cultivate its natural gas sector in 1987 at a time when many in the industry hardly saw any potential in gas. This decision paid dividends many times over: Qatar today has emerged as the world largest exporter of LNG, GTL (Gas-to-Liquids) and helium. The revenue from the natural gas sector has propelled its economy and has given it special importance globally.

Despite its position of leadership on the global LNG market, Qatar is aware that the gas sector is evolving quickly. In fact, a new era in the natural gas sector is on the........

© Al Jazeera