Saudi Arabia broke diplomatic relations and all land sea and air contacts with fellow Gulf Arab state Qatar on Monday, saying the move was necessary to protect the kingdom from what it described as terrorism and extremism.
The United Arab Emirates, Bahrain and Egypt also cut ties with Qatar on Monday.
Crude and natural gas prices jumped after the news with global benchmark Brent up 1.66 a barrel and U. West Texas Intermediate up 1. natural gas prices quoted at the U. Henry Hub jumped 1.040 per million British thermal units.
Saudi Arabia`s official state news agency, citing an official source, said the kingdom had decided to sever diplomatic and consular relations with Qatar "proceeding from the exercise of its sovereign right guaranteed by international law and the protection of national security from the dangers of terrorism and extremism".
Saudi Arabia cut all land air and sea contacts with Qatar "and urges all brotherly countries and companies to do the same."
Charles Lister, a senior fellow at the Middle Eats Institute, responded on Twitter to the news by pointing out that Qatar "is very heavily reliant on food supplies accessed" through Saudi Arabia, so a closing of the borders poses a "very" serious challenge to Doha.
Qatar is the world`s largest exporter of liquefied natural gas (LNG) and has extensive air and banking links throughout the countries that snapped diplomatic ties. State-owned flag carrier Qatar Airways uses air terminals in all of the countries and has extensive links to Europe, Asia and the United States.
Qatar shares the world`s largest gas field, South pars, with Iran. The commercial and business ties have irritated Saudi Arabia and other Gulf Cooperation Council countries at odds with Iran over Tehran`s support for Shia-linked militants.
Bahrain, a close Saudi ally, also said on Monday it has cut diplomatic relations with Qatar, accusing its fellow Gulf Arab state of backing terrorism and interfering in Bahrain`s internal affairs.
Bahrain is also cutting air and sea contacts with Qatar and was giving its citizens in Qatar 14 days to leave.
The United Arab Emirates` decision to cut ties with Qatar was reported by state news agency WAM, accusing its Gulf Arab neighbor of supporting extremism and undermining regional stability.
The Emirates gave diplomats 48 hours to leave the country, citing their "support, funding and embrace of terrorist, extremist and sectarian organisations," WAM said.
—CNBC contributed to this report.
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