Qatari financial markets plunged after four Arab nations announced that they cut diplomatic ties.
Qatar’s main equity benchmark closed down by more than 7% on Monday. The country’s 2026 international bond saw yields climb by over 20 basis points.
Oil and natural gas prices were lower, as well. Brent crude oil, the international benchmark, was down by 0.9% at $US49.48 per barrel, while natural gas was down by 1.2% at $US2.963 as 8:44 a.m. ET.
“[B]ut there are good reasons to think that the impact on these economics and global energy markets will be limited,” Jason Tuvey, Middle East economist at Capital Economics, said in a note.
Qatar specialises in natural gas, and is only a minor oil producer, so the impact on oil markets is likely to be limited, he explained. Moreover, Qatar’s trade ties with its neighbours are “relatively small,” and most of its oil and gas exports go to Asia.
“One potential concern is that Qatari banks may now find it more difficult to secure wholesale financing, which could precipitate a more abrupt cooling of the country’s credit boom,” he added.
Saudi Arabia, the United Arab Emirates, Bahrain, and Egypt announced earlier they were severing diplomatic ties with Qatar, and were closing all land, sea, and aviation ports.
Last month, Qatar’s state-run news agency published “explosive” remarks attributed to Emir Sheikh Tamim bin Hamad Al-Thani, although Doha denied all the comments and claims it was the victim of a “shameful cybercrime.”
The stories quoted the Emir as “questioning US hostility towards Iran, speaking of ‘tensions’ between Doha and Washington, commenting on Hamas, and speculating that President Donald Trump might not remain in power for long,” according to the AFP.
The alleged comments were published after Trump’s trip to the region in May.
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