Crisis with Qatar to Take Apart OPEC Efforts for Short Term

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The ongoing growing crisis with Qatar will break up OPEC’s efforts to balance the oil market for the short term. Cyril Widdershoven. a Middle East geopolitical specialist and energy analyst. a partner at Dutch risk consultancy VEROCY and SVP MEA-Risk. told Trend June 5.
He pointed out that THE increased instability within OPEC is not going to be taken lightly at current market circumstances.
The spat began after Qatar’s state-run news agency. QNA. released remarks attributed to ruling Emir Tamim bin Hamad al-Thani. in which he criticized other Gulf leaders and called for an easing of tensions with Iran. QNA has denied that the comments were made by the Emir. claiming that they were the result of a cyber attack. But this hasn’t washed with Saudi Arabia and its allies. They argue that the comments highlight Doha’s close ties with Iran and reinforce their long-held concerns over Qatar’s support for terrorism.
Bahrain. Egypt. Saudi Arabia and the United Arab Emirates have severed diplomatic ties with Qatar. accusing it of fueling extremism and terrorism.
All four countries also suspended travel to and from Qatar.
Qatar says move is `unjustified` and says it carries out its duties in the fight against terrorism.
“A full confrontation. even with possible military escalation could lead to a situation in which a possible link with Iran is easily to be made. Qatar`s opening towards Tehran is not seen as very positive.” noted the expert.
Whole situation could blow up. if some are not keeping their cool. he said. adding that a military action could lead to more instability or even closure of part of oil exports from the Gulf.
Current prices will be going up higher. even if the discussion will cool down. said Widdershoven.
On May 25. OPEC member countries and non-OPEC parties. Azerbaijan. Kingdom of Bahrain. Brunei Darussalam. Kazakhstan. Malaysia. Mexico. Sultanate of Oman. the Russian Federation. Republic of Sudan. and the Republic of South Sudan agreed to extend the production adjustments for a further period of nine months. with effect from July 1. 2017.
The reductions will be on the same terms as those agreed in November.