The flare-up in the Middle East added to the instability in the world's most important energy-exporting region. Saudi Arabia is the world's biggest exporter of crude, while Qatar is home to substantial natural gas resources.
But a diplomatic dispute will not necessarily threaten supplies. Amid a global glut, other countries could easily step in to fill the void, provided tensions in the region do not escalate.
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Investors seem to be making that calculus. While oil prices initially spiked 1.6 percent on Monday, the markets quickly fell back to just above $50 a barrel.
"It is very difficult to see how this break in diplomatic relations would lead to a disruption of oil supplies," said Paul Stevens, a Middle East oil specialist at Chatham House, a research organization in London.
Investors appear to be focused for now on the oversupply of oil, which has kept prices low for more than two years. Saudi Arabia and other major oil-exporting nations are trying to keep supplies in check, but American shale players continue to ramp up production.