Bahrain, Egypt, Saudi Arabia and the UAE severed ties with Qatar on Monday and moved to cut off land, sea and air routes to the energy-rich nation, accusing it of supporting regional terror groups and Iran. Yemen, Libya’s eastern-based government and the Maldives joined the ban later, plunging the international travel hub into chaos and igniting the biggest diplomatic crisis in the Gulf since the 1991 war against Iraq.

Global equity markets dipped along with oil prices amid concerns that the diplomatic rift may weaken a multi-national pact on crude output cuts. Qatar, which will host the 2022 Fifa World Cup and is home to a major US military base, is the world’s biggest supplier of liquefied natural gas (LNG) and a major supplier of condensate.

Foreign minister Sushma Swaraj said India didn’t foresee any problems for its own relations in the Gulf as it “is an internal matter of GCC (Gulf Coordination Council)”. “Our only concern is about Indians there. We are trying to find out if any Indians are stuck there,” she said, steering clear of the Islamic world’s latest implosion.

The government’s response is surprising given that at last count there are over 6,50,000 Indian nationals living and working in Qatar, who outnumber native Qataris by almost 2:1.

“They (Gulf nations) have done this before, we hope things will get better soon,” she said.

But it highlights the challenges and diplomatic balancing that India will have to conduct especially as it deepens economic and security relationship with the Gulf Arab states. Qatar's stock market tanked today while there are reports of people queuing up outside grocery stores to stock up if the Saudi blockade gets worse. Earlier, the traffic to Qatar was mainly from Kerala, but now the top source state is UP, followed by Bihar.

Qatar came under attack by the Saudi-led grouping of Bahrain, Egypt and UAE, Yemen (whatever exists of it) and surprisingly, Maldives, which cut off diplomatic ties as well as civil aviation and shipping ties days after a Qatar news agency report quoted the Qatar emir Sheikh Sheikh Tamim bin Hamad Al Thani criticizing the growing targeting of Iran by the Sunni alliance.

Qatar, sharing the worlds largest gas field with Iran finds itself particularly vulnerable, although ironically Qatar follows the orthodox intolerant version Wahhabi Islam, just like Saudi Arabia.

In 2014, Saudi Arabia UAE and Egypt had isolated Qatar again, in protest against its support to the Muslim Brotherhood in Egypt. The blockade ended 10 months later, but Qatar continued on its path. In recent weeks, Qatar has apparently evicted Hamas activists from its country, and is fighting an unlikely duo, Israel-Saudi Arabia to get the US to move its base from Qatar.

In recent years, it has been clear that Qatar has been one of the biggest funders to the ISIS, though there have been reports of its ties to Hamas and Hezbollah, which puts it on collision course with Israel. Although it's equally true that Saudi Arabia has also supported hardline Islamist groups in and outside the region, so no moral superiority applies to either side.

The Saudi action against Qatar is mainly targeted at Iran, and seeks to punish any country that gets close to or acknowledges Iran's growing power. Qatar's sheikh Tamim recently made headlines by speaking to Hassan Rouhani on the phone after he won the Iran presidential elections.

Qatar has played a mediatory role as well, hosting the Afghan Taliban in an office in Doha, which they converted into an "embassy", prompting widespread criticism. But it has remained a place where countries and groups hoping to start talks with the Taliban can meet them, even though they have been isolated by the Taliban core leadership in Pakistan. This has been a problem for India but India has held its nose.

But India takes over 90 per cent of its natural gas import from Qatar. In addition, Qatar is in the process of building a domestic airine in India. That itself puts India in a unique place. Saudi Arabia, on the other hand is among the top suppliers of oil to India. Hitherto neither side have used their foreign partners as leverage against the other. Its not yet clear how deep the present rift is at this point. India would be following the current crisis closely, particularly watching out for energy price spikes.

It is undeniable that Saudi Arabia feels emboldened after Donald Trump's latest visit to the region where he not only supported the kingdom but went after Iran as the biggest sponsor of terrorism in the region. However, US' forward base of its CENTCOM is stationed in Qatar since 2003 when it was tossed out by Saudi Arabia. The US has also sent some of its terrorist prisoners from Guantanamo Bay to Qatar, including five which were exchanged by Barack Obama for a US soldier Bowe Bergdahl from the Taliban.

So it is likely a mediated settlement may yet happen with the US - and possibly Oman - in the middle.

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