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A host of Arab and Muslim countries led by Saudi Arabia have unexpectedly cut off diplomatic relations with Qatar. accusing Doha of supporting terrorism and engaging in efforts to destabilize the region. The sudden move will be sure to have lasting geopolitical consequences. but according to analysts. may also be a boon for oil prices.
In the early hours of Monday morning. Saudi Arabia. the UAE. Bahrain and Egypt announced that they had severed diplomatic relations with Qatar. Hours later. Libya. Yemen and the Maldives also announced that they too had cut ties.
Doha protested. calling the decision `unjustified.` and `based on assertions without foundation.` The countries severed ties with the Persian Gulf State after accusing it of supporting terrorist groups. including the Muslim Brotherhood. and of ongoing attempts to destabilize countries in the region.
The Saudi-led coalition annulled Qatar`s participation in Riyadh`s brutal war against the Houthi rebels. The Saudi-backed Yemeni government in Aden also accused Doha of supporting Shiite Houthi rebels and other `extremist groups.`
Geopolitical consequences aside. market experts believe that the situation around Qatar may serve to become a positive factor for rising oil prices. Speaking to RIA Novosti. Sberbank CIB analyst Valery Nesterov said that the diplomatic row is another source of tension – and tension has a tendency to push prices up.
`The emergence of yet another source of tension. in my opinion. is quite a serious factor that will support oil prices [at their current levels] or push them upward.` Nesterov said.
