With the continuing fall in oil prices making headlines across the globe, I thought it would be worth investigating further the economic effects (if any) this would have on Qatar.
The decline of oil
The price of Brent crude oil has rapidly fallen since June, from $115 a barrel to just $59.
Qatar is, of course, an incredibly oil rich country – so the initial assumption of many would probably be that the global oil situation would have a deleterious effect on Qatar’s economy.
With other countries in the Gulf, such as Oman and Bahrain, expected to be particularly hard hit one could be forgiven for assuming Qatar would also be predicted to suffer a similar fate.
Is Qatar immune to cheap oil?
It seems however that Qatar is immune to fall in oil prices. Qatar predicted its economy would grow by 7.7% next year – which would see its largest growth since 2011.
The expansion in non-hydrocarbon sectors will continue to propel the country forward economically. I’ve recently blogged about the diversification of Qatar’s economy and how this has made it less susceptible to the effects of the oil market.
However, the ministry did warn that if the price of oil were to continue to decline in the future it could affect the nation’s growth, though the wider economy would still be likely to be shielded by the strength of state finance.
Will the oil market eventually settle?
Qatar’s energy minister has recently said that individual OPEC countries would be monitoring the situation closely whilst adding that the market would settle eventually.
The Organization of the Petroleum Exporting Countries declined to cut production at a meeting on 27th of November and major Gulf OPEC members have since shown no sign of changing tact.
Ultimately however, whilst the only predictable thing about the oil market remains its unpredictability, all the evidence suggests that Qatar is better suited than most oil exporters to deal with the collapse in prices.
James Swallow is Commercial Director of Middle East based PRO Partner Group. PRO Partner Group specialises in providing foreign investors with a seamless and financially efficient means to setting up a profitable corporate presence in the UAE, Qatar and Oman.