Qatar announced plans to pull out of OPEC on Monday, just days before a crucial meeting between the influential oil cartel and its allies.
Speaking at a news conference, Qatar’s Energy Minister Saad al-Kaabi said the country would withdraw from OPEC on January 1, 2019, ending a membership which has stood for more than half-a-century.
The decision comes after Qatar reviewed ways in which it could improve its global standing and plan its long-term strategy.
While Qatar is one of OPEC’s smallest oil producers, especially when compared to the likes of de facto leader Saudi Arabia, it is one of the world’s largest producers of liquefied natural gas (LNG).
The country’s energy minister said Monday that the move represents a “technical and strategic” change, Reuters reported, and was not politically motivated.
Qatar’s Al-Kaabi also said the decision was not linked to the 18-month political and economic boycott of Doha.
Since June 2017, OPEC kingpin Saudi Arabia — along with three other Arab states — has cut trade and transport ties with Qatar, accusing the country of supporting terrorism and their regional rival, Iran. Qatar denies the claims, saying the boycott hampers its national sovereignty.
The Middle East-dominated group’s final meeting of the calendar year is now expected to be Qatar’s last. It has been an official OPEC member since 1961.
OPEC and non-OPEC members are due to meet in Vienna, Austria on Thursday, with the aim of reaching an accord over possible output cuts.
Oil prices have fallen more than 25 percent since climbing to a four-year peak in early October, amid intensifying concerns of oversupply and worries over slowing economic growth.
However, growing expectations of a fresh round of production cuts later this week and a temporary trade truce between the U.S. and China helped crude futures pare some of their recent losses on Monday.
International benchmark Brent crude was trading at $62.25 a barrel at around 6:40 a.m. London time, up around 4.7 percent, while West Texas Intermediate (WTI) stood at $53.53, more than 5 percent higher.