Bahrain, Egypt, Saudi Arabia, the United Arab Emirates and Yemen made no demands of Qatar as their decision plunged the global travel hub into chaos and ignited the biggest diplomatic crisis in the Gulf since the 1991 war against Iraq.
The co-ordinated move dramatically escalates a dispute over Qatar's support of the Muslim Brotherhood, the world's oldest Islamist movement, and adds accusations that Doha even backs the agenda of regional archrival Iran.
Four gulf countries as well as Egypt cut off all ties with Qatar, for supporting extremist groups..
Qatari stocks suffered their worst single day performance since 2009 while the price of oil dipped lower Monday morning with US WTI futures trading at $47.70 a barrel, down 26 cents.
All the nations also said they planned to cut air and sea traffic to the peninsular country.
Abu Dhabi's state-owned Etihad Airways, Dubai's Emirates Airline, budget carriers Flydubai and Air Arabia, and Bahrain's national carrier Gulf Air, have all said they will suspend flights to and from Doha.
Less than a month ago, US President Donald Trump visited the region to cement ties with powerhouse Saudi Arabia - the first foreign stop of his young presidency.
The government has been borrowing at home and overseas to help finance some $200 billion of infrastructure spending as it prepares to host the World Cup soccer tournament in 2022.
The Qatar Stock Exchange fell more than 7 percent.
In contrast to other Gulf states, "Qatar does not like being seen to be in the pocket of Saudi Arabia", and prefers to pursue more independent foreign policy, including in its relations with Iran.
"We certainly would encourage the parties to sit down together and address these differences", he said in Sydney.
Regional powerhouse Turkey, an ally of both the Muslim Brotherhood and Qatar, urged dialogue to resolve the spat.
A Qatar Airways aircraft is seen at a runway of the Eleftherios Venizelos International Airport in Athens.
New metro and roadway projects are also in place to help to improve transport links in Qatar in time for the tournament.
There are rising concerns on what happening between Qatar and its neighbours.
The former army chief and now president, Abdel Fattah al-Sisi, along with the new government's allies in Saudi Arabia and the UAE, blacklist the Brotherhood as a terrorist organisation.
Qatar exported 79.62 million tons of LNG past year, or 30% of global supply, according to the International Group of Liquefied Natural Gas Importers, known by its French acronym GIINGL.