Dubai: Analysts expect little impact on the deal between Opec and non-Opec nations to cut output from the growing political rift between Saudi Arabia, the UAE and Qatar.

With a production of 600,000 barrels per day, Qatar has a market share of 2 per cent among the Opec countries, with Saudi Arabia, the world’s biggest oil exporter, cornering more than 33 per cent of the pie.

Spencer Welch, Director of IHS Energy in London, expects minor impact if Qatar decides to withdraw from the Opec production cut deal. “We see a relatively minor impact even if they withdrew from the supply cut deal,” Welch said through email.

However, Jameel Ahmad, vice-president of corporate development & market research at Forextime, said it would be premature that the development could have an impact on the Opec deal. “A potential risk to monitor might be that Qatar will look at this as being provided with less encouragement to comply with the agreed production quota,” Ahmad told Gulf News.

Opec (Organisation of the Petroleum Exporting Countries) and non-Opec producers, which corner more than 50 per cent of the world output, decided to extend the 2016 agreement to cut output by another nine months, a move that is expected to cut excess supplies in global market.

But, oil prices have moved southward ever since the extension on effectiveness of the deal even as US shale ramps up. Brent prices have fallen 9 per cent since the agreement was signed late last month.

“In the instance of Qatar breaking away from the Opec deal did occur, or if other producers included in the Opec agreement diverted away from the production quota then this would be seen as having negative connotations on the price of oil,” Forextime’s Ahmad said.

Even the oil markets are suggesting of a limited impact.

Brent crude reversed early gains to trade 1 per cent lower. Brent for August delivery was trading at $49.42 per barrel. West Texas Intermediate was 0.97 per cent lower at $47.20 per barrel.

The situation that exists as of now sans the Qatar row, Ole Hansen, head of commodity strategy at Saxo Bank, sees very limited options for Opec.

“Opec cannot do much more than wait and hope that demand growth keeps up and that compliance remains high,” Hansen said. Traders would still watch the demand and supply situation.

Ahmad from Forextime added: “I believe that the supply/demand ratio will continue to be the main driver for investor sentiment and unless this unexpected news actually impacts the ongoing supply story that has dominated the market for over two years.”

LNG supplies

Asian LNG (liquefied natural gas) clients are expected to be impacted in case of any disruption.

Qatar is the world’s largest supplier of LNG contributing to 30 per cent of global supplies.

“By land, Qatar is completely blocked by Saudi Arabia. By sea, its exporting tankers have to pass through the Strait of Hormuz, situated between Iran and the UAE, putting it in a precarious situation any way it turns,” said Clement Thibault, Senior Market Analyst at Investing.com.

“Asian customers such as Japan, India and South Korea would be the most affected by a disruption in LNG service, since they are the major importers of Qatari gas,” Thibault said.