Oil prices rise following diplomatic strain between Qatar and Arab nations
The decision by Saudi Arabia, the UAE, Bahrain, Egypt and Yemen to cut diplomatic ties with Qatar has led to a 1 per cent rise in price of oil while stock prices in the Gulf retreated across the board on Monday.
Markets reacted to the escalation of the diplomatic row in the Gulf region and sent the price of oil 1.04 per cent higher to $50.47 per barrel, Xinhua news agency reported.
In Doha, the Qatar Exchange Index plummeted 7.94 per cent to hit 9,135, marking an 18-month low.
In the UAE, the Dubai financial market DFM dived 1.36 per cent one hour after opening and fell below 3,300. Bank shares in particular posted heavy losses.
Media reports indicated that all UAE airlines, including budget flyer FlyDubai and Etihad from Abu Dhabi, will stop flying to Qatar from Tuesday.
In Abu Dhabi, the UAE capital, the ADX General Index declined by 0.36 per cent, trading around 4,467.
The Bahraini All-Share Index bucked the regional slump and gained 0.58 per cent.
A statement issued by Saudi Arabia said the "decisive" measure was due to "gross violations committed by authorities in Qatar over the past years”.
Saudi Arabia also said Qatari troops would be pulled from its ongoing war in Yemen. It said the move was necessary to protect the kingdom from what it described as terrorism and extremism.
All four nations said that they planned to cut air and sea traffic to the peninsular country.