Oil price wobble amid Qatar diplomatic rift


With production capacity of about 600,000 barrels per day (bpd), Qatar's crude output is one of OPEC's smallest but tension within the Organization of the Petroleum Exporting Countries could weaken the supply deal, aimed at supporting prices.

Among the nations set to take part include Saudi Arabia, the United Arab Emirates and Bahrain, who all cut diplomatic ties on Monday.

The economic fallout loomed immediately, as Abu Dhabi's state-owned Ethihad Airways, Dubai's Emirates Airline and budget carrier Flydubai said they would suspend all flights to and from Doha from Tuesday morning until further notice.

The Gulf countries ordered their citizens out of Qatar and gave Qataris overseas 14 days to return home to their peninsular nation, whose only land border is with Saudi Arabia.

Before Monday, Qatar had appeared unperturbed by the growing tensions.

Winning the right to host the 2022 World Cup was a major coup for Qatar, which has used its natural gas riches to promote its global profile.

The four countries announced the withdrawal of their diplomatic staff from Qatar, a gas-rich nation that will host the 2022 FIFA World Cup and which is home to a major U.S. military base.

Iran's foreign ministry today urged Qatar and neighbouring Gulf Arab countries that have severed diplomatic ties with the gas-rich peninsula to engage in dialogue. Its Gulf Arab neighbors responded with anger, blocking Qatari-based media, including the Doha-based satellite news network Al-Jazeera.

The head of Iran's influential parliamentary committee on national security and foreign policy said the differences between Saudi Arabia and Qatar are the result of US President Donald Trump's recent visit to the region. Saudi Arabia also said Qatari troops would be pulled from the ongoing war in Yemen.

US Secretary of State Rex Tillerson told reporters in Sydney on Monday that the spat would not affect the fight against religious militants and that Washington has encouraged its Gulf allies to resolve their differences.

Gulf allies have repeatedly criticized Qatar for alleged support of the Muslim Brotherhood, a almost 100-year-old Islamist group considered a terrorist organization by Saudi Arabia and the UAE.

"We are confident that you will continue the journey of your father. and his efforts in serving the state of Qatar and its brotherly people as well as strengthening relations between the two nations", King Abdullah said. "Banking systems in the region are inter-related" and interbank interest rates suggest that the Qatar banking system is less liquid than that in Saudi Arabia and the U.A.E.

"What is important is that Qatar has and always will have a large gas field with Iran and so Qatar's need to have decent relations with Iran is a fact of life", Sluglett explained.

The rift between Qatar and the other Gulf countries had taken a turn after the former's state-run news agency was hacked.

The hawkish tone Trump brought in his visit to over 50 Muslim leaders in Riyadh on Tehran and on terrorism is seen as laying the groundwork for the diplomatic crisis.