Qatar faces possible further sanctions by Arab states that have severed ties with Doha over allegations of links to terrorism, as a deadline to accept a series of demands is expected to expire on Sunday night with no signs of the crisis ending.
Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman al-Thani said the demands were made to be rejected, adding that the Arab ultimatum was aimed not at tackling terrorism but at curtailing his country’s sovereignty.
The feud erupted last month when Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed diplomatic and travel ties with Qatar, accusing it of supporting terrorism and being an ally of regional foe Iran, charges which Doha denies.
The demands include closing a Turkish military base in Qatar and shutting down the Al Jazeera pan-Arab television network, which Doha also rejected.
Qatar’s stock market fell sharply on Sunday as a deadline for Doha to accept a series of political demands by four Arab states was expected to expire later in the day with no sign of a resolution.
The Qatari stock index sank as much as 3.1 percent in thin trade, bringing its losses to 11.9 percent since June 5, when Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and trade ties, accusing Doha of backing militants.
Stocks tumbled across the board on Sunday, with 41 lower and only one higher. Qatar National Bank, the largest listed lender in the Gulf, lost 3.1 percent.
Gulf countries have insisted the demands were not negotiable.
The UAE ambassador to Russia has said Qatar could face fresh sanctions if it does not comply with the demands.
Gulf states could ask their trading partners to choose between working with them or with Doha, he said in a newspaper interview last week.
But UAE foreign affairs minister Anwar Gargash played down the chances of an escalation, saying “The alternative is not escalation but parting ways”, suggesting Qatar may be forced out of the six-member GCC alliance.
The crisis has hit travel, food imports and ratcheted up tensions in the Gulf and sown confusion among businesses, while pushing Qatar closer to Iran and Turkey.
But it has not hit energy exports from Qatar, which is the world’s biggest exporter of liquefied natural gas (LNG) and home to the region’s biggest U.S. military base.