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Utopia Talk / Politics / Qatar leaving OPEC
murder
Member
Mon Dec 03 06:50:12
Qatar has announced that it is leaving OPEC next month. How long before Saudi Arabia invades?

Seb
Member
Mon Dec 03 07:20:06
I think that ship has sailed.

1. They already blinked in that.
2. The major powers will like opec losing market share. Trump will love it, even if he values cosying up to the Al Sauds.
3. Politically after kashoggi nobody will back Saudi on that
4. Western and NATO bases in Qatar make military action near impossible (why they blinked before)
5. Even if nobody would directly intervene to stop Qatar, it will make it harder again to continue to provide arms and other support to the efforts in Yemen and turn a blind eye.

Meanwhile, while Qatar has high market share in LNG which doesn't compete too much with Saudi, and in crude production they are about 500k barrels a day and no scope to radically increase production (Saudi is in excess of 10m barrels a day).

My guess then is there will be more angry diplomacy but no military action.

Rugian
Member
Mon Dec 03 08:12:36
Did Qatar radically cut its production recently? Wikipedia says they were producing 1.5 million barrels a day as of 2016.
murder
Member
Mon Dec 03 08:59:26

OPEC is the source of Saudi Arabia's power. They can afford to have it fall apart or lose influence.

To quote Aeros ... "This can only mean war."



murder
Member
Mon Dec 03 09:00:12
can't* afford
Average Ameriacn
Member
Mon Dec 03 09:01:25
MAGA: we will sell weapons to both of them.
murder
Member
Mon Dec 03 09:05:40

"Did Qatar radically cut its production recently? Wikipedia says they were producing 1.5 million barrels a day as of 2016."

There were production cuts in 2016, but aside from that I'm not aware of any reason why their production would have dropped by 2/3.

Supposedly they want to increase oil production on top of ramping up their LNG production.

werewolf dictator
Member
Mon Dec 03 09:16:29
the world shouldn't allow nations to quit opec if they want to increase oil production.. when *science* says there are 12 years to stop climate change doomsday
Sam Adams
Member
Mon Dec 03 10:39:01
This isnt about oil. Theres an ongoing catfight between the royals of qatar and the other gulf royals.

Quite stupid really.
Sam Adams
Member
Mon Dec 03 11:18:49
"not aware of any reason why their production would have dropped by 2/3."

Saudi cutting off shared pipeline and port access?
murder
Member
Mon Dec 03 12:10:00

I don't know. I can't think of any reason why they would have shared pipelines with the Saudis or use their ports.
Seb
Member
Mon Dec 03 12:46:27
Rugian:

That's gas inclusive (barrel of oil equivalent), most of which is lng and not a substitute for Saudi crude and not in Saudis market, so little economic impact.

Murder:

Qatar doesn't threaten that though: the rest of the Arab world is already lined up against Qatar, what chance is there then of a sudden mass defection from OPEC over a relatively small (<2%) market share.

The direct costs are worse than any potential costs.

He's essentially betting that demand for oil has or will peak (plus he will have a much better idea about the true number of years of reserves Saudi has).

The whole point of MBS strategy is to ditch their dependency on oil and hence the importance of OPEC.

Broadly his strategy is:
1. Diversify the economy and body productivity (get rid of the rentier culture)

2. To do this, he needs to liberalise the country.

3. To do that he needs to take on the Islamists.

4. To take on the Islamists, he needs to neutralise other security threats that the kingdom rely on whaabists to contain.

Hence the deal with Trump: throw Palestinians under the bus, cut a deal with Israel/Russia/Syria so Iran can be marginalised in Syria, neutralise Iran's influence in Saudi neighbors, and the YS must be lined up to contain Iran which means anything looking like detente between the US and Iran must go.

Once the US and Iran are on a cold war footing, the Arabian peninsula secured against Shia factions, the Whaabists suppressed, then that's the much more favourable environment for MBS liberal agenda to be forcibly stamped onto Saudi society, making it much easier to do a broad range of business with, allowing diversification away from oil.

McKinsey did a huge plan for him about five years ago I think. Maybe more, maybe less, and the partner involved now works for him.

In this context, Qatar has been annoyingly independent and was seen to be picking up where Saudi left off in using Sunni fundamentalists as proxies or at least being a sponsor for conservative Islam. Qatar was supposed to roll over but didn't.

But overall, I don't think he'd do anything that would jeopardise his strategy in a real way to head off a theoretical "Domino" effect on OPEC which he appears to view as fundamentally obsolete in the medium to long term.
The risk of splitting the alliance, forcing Qatar into deeper military alliance with whaabists or worse, Iran, makes it risky, let alone making the Yemmen war harder for him.

But he's had a tendency to miscalculate Western reaction (Qatar, Kagoshi) so you never know.



Seb
Member
Mon Dec 03 14:09:40
https://www.opec.org/opec_web/en/about_us/168.htm

600,000 b/pd crude production for 2017 according to opec.

Seb
Member
Mon Dec 03 14:13:20
Rugian, I can't see your figure in wiki.

I see this though "Oil production in June 2016 seemed to be around 670,000 barrels per day, a bit down from February 2016 production of 692,000 barrels per day"
Seb
Member
Mon Dec 03 14:24:15
I think MBS thinks of himself like a Saudi sun king. Even down to locking up his aristocracy in gilded cages and shaking them down for cash.
Seb
Member
Mon Dec 03 14:25:20
And starting reckless regional wars over religious affiliation in order to cement his regional status.
Seb
Member
Mon Dec 03 16:56:41
Rugian
Member
Mon Dec 03 18:23:24
Ah, that makes sense. Oil production does indeed include natural gas. TIL

The figure came from the article on OPEC. Qatar has a daily oil production of 1,522,902 barrels/day, compared to SA at 10,460,710.
McKobb
Member
Mon Dec 03 18:44:26
Blood for oil!
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