Despite Qatar aiming to ramp up its lucrative LNG (liquefied natural gas) exports in the midst of a tense diplomatic crisis, ratings agency Moody's has cut its outlook on the country's sovereign credit to "negative" from "stable".
The ratings agency said the change was due to the economic and financial risks arising from the ongoing dispute with Saudi Arabia and its allies, which accuse Qatar of supporting terrorism, an allegation the country has denied.
"The likelihood of a prolonged period of uncertainty extending into 2018 has increased and a quick resolution of the dispute is unlikely over the next few months," Moody's said.
The ongoing clash between Qatar and a coalition of countries, including Saudi Arabia, the UAE, Bahrain and Egypt, was still being negotiated. Qatar has responded to a list of 13 demands put forward by Saudi Arabia and its allies, but no details of the response were made public.
"I'm a bit surprised Moody's has downgraded Qatar," AMP Chief Economist, Shane Oliver, told CNBC's "The Rundown" on Wednesday.
"As far as I know, their export links are still operational, given that most of it goes by sea, so I don't really see what the financial risk is there." He added.