Oil prices are down Monday after Saudi Arabia, the UAE, Egypt and Bahrain announced the closing of transport links with Qatar, in response to alleged support for extremist groups.
Though Qatar is one of OPEC’s smallest producers, tension within the bloc has spurred uncertainty regarding a recently extended production cut deal.
“I think it’s still going to be a bit of a debate on the true impact it can have on the oil market,” Olivier Jakob, strategist at Petromatrix was quoted by Reuters as saying.
Jakob explained that “in terms of oil flows it doesn’t change very much but there is a wider geopolitical impact one needs to consider.”
“Investors continue to doubt the ability of OPEC to rebalance the oil market, with crude oil prices remaining under pressure amid further signs of rising U.S. oil production,” ANZ bank said.