A diplomatic rift between Qatar and its Gulf neighbors may cost them billions of dollars by slowing trade and investment and making it more expensive for the region to borrow money as it grapples with low oil prices.
With an estimated $335 billion of assets in its sovereign wealth fund, Qatar looks able to avoid an economic crisis over the decision on Monday by Saudi Arabia, Egypt, the United Arab Emirates and Bahrain to cut air, sea and land transport links.
The tiny state's newly expanded port facilities mean it can continue liquefied natural gas exports that earned it a trade surplus of $2.7 billion in April, and import by sea goods that used to come over its land border with Saudi Arabia, now closed.
But parts of Qatar's economy could suffer badly if the dispute, over Riyadh's allegations that Doha has been supporting terrorism, drags on for months - a prospect that helped to push the Qatari stock market down more than 7 percent on Monday.
Fast-growing Qatar Airways, at the center of the tiny state's effort to become a tourism hub, is likely to face losses from being barred some of the Middle East's biggest hubs.
Qatar's government has been borrowing at home and abroad to help finance some $200 billion of infrastructure spending as it prepares to host the World Cup soccer tournament in 2022. A drop in Qatari bond prices on Monday suggested the borrowing will become more expensive - possibly slowing some projects.
Bonds of other countries in the six-nation Gulf Cooperation Council barely moved on Monday, but some foreign bankers said the whole region could end up paying more to borrow if diplomatic tensions persisted.
“If this dispute goes on for a while, the ramifications could be huge,” said an international banker based in the Gulf, declining to be named because of political sensitivities.
“Asset managers will not differentiate between Qatar and the rest of the GCC, and international managers will take their hands off any credit from the GCC. If Qatar is seen as a terror financing or compliance issue, then asset managers will be cautious."
The initial reaction of oil markets was not positive, as fears grow that a diplomatic rift among Gulf Arab producers might harm an oil output control agreement, which is aimed at supporting prices in the coming months. Oil was slightly down on Monday.
Because they all rely heavily on oil and gas exports, the GCC states have only weak trade and investment ties with each other, which will limit the economic fallout of their dispute. The UAE is Qatar's biggest trading partner from the GCC but only its fifth largest globally.
Similarly, Saudi Arabia and other GCC countries traditionally account for only about 5 to 10 percent of trading on the Qatari stock market, according to exchange data, suggesting even a total pull-out would not sink the market.
Nevertheless, Qatar will face higher costs in some areas. Saudi Arabia and the UAE provided $309 million of Qatar's $1.05 billion of food imports in 2015. Much of them, especially dairy products, came over the Saudi land border; Doha will have to make other arrangements for them.
Construction costs in Qatar could also rise, fueling inflation across the economy, because aluminum and other building materials can no longer be imported by land.
Saudi Arabia, the United Arab Emirates and Bahrain withdrew their ambassadors from Qatar for eight months in 2014 over Doha's alleged support of Islamist groups, but that had minimal market or economic impact because it did not involve a ban on transport links. Trade and investment went on much as before.
This time, Saudi Arabia has promised to "begin legal procedures for immediate understandings with brotherly and friendly countries and international companies to apply the same procedures as soon as possible".
It is not clear that Riyadh will be able to persuade more countries to cut links with Doha. But it could try to force foreign companies to make a choice between doing business with Qatar and obtaining access to its own, much larger market, which it is opening up as part of economic reforms.
Cairo-based bankers said on Monday that some Egyptian banks had halted dealings with Qatari banks. It was not clear whether GCC banks would do the same; UAE commercial bankers told Reuters they were waiting for guidance from their central bank.
Stock markets in Dubai and several other Gulf centers fell on Monday - although not by nearly as much as Qatar - in a sign that investors around the region were worried.
“Overall it's not good. I don’t think that the region has been in such turmoil so close to home. And I think everyone is speculating how far these steps will go forward," said Mohammed Ali Yasin, chief executive of Abu Dhabi's NBAD Securities.
"Everyone is hoping that there will be intervention by wise people and things will cool down. But what we have seen is a gradual escalation."