Gulf crisis: A political earthquake with aftershocks in Britain
When UK Prime Minister Theresa May addressed the leaders of the Gulf Cooperation Council in December, she promised that as the UK leaves the European Union her government will "build a bold new chapter in our cooperation".
Read between the lines, what May was referring to – and what the UK government wants – are critical trade deals with the Gulf after Brexit.
Gulf countries were reportedly lining up for "signature-ready" trade deals, ready to roll as soon as the UK was out of the EU. UK Foreign Secretary Boris Johnson was even hawking Rolls Royce cars and underwear to Arab ambassadors.
Six months later, with a Gulf rift that may have looked vaguely reparable just two weeks ago now sliding into a longer-term crisis, rating agencies downgrading Qatar and UK banks halting sales of the riyal, there are big question marks over what happens next.
While the Gulf tensions had been brewing for a long time, the speed and severity of the economic actions put in place has "surprised almost everyone," said Rachel Ziemba, managing director at Roubini Global Economics.
"Those haven't massively damaged Qatar, but there does seem to be an inclination to double down. And that's not a good place for a country that is heavily engaged in trade – and particularly financial services with all of the key players," she said.
And as the 10-day Saudi-imposed deadline for Qatar to meet its demands comes to an end on Monday, many people, from the City's board rooms and law firms to Westminster, will be watching carefully.
Trade between the UK and Gulf is worth more than $40bn annually, in addition to the multi-billions that various Gulf sovereign wealth funds have invested across the UK.
Some analysts say it is possible that if the GCC splits, the UK and the GCC minus Qatar will simply make a trade deal and then make a second deal with Qatar.
Others warn it might not be so easy.
"We tend to go on and on about our special relationship with the Gulf and how they are so important to us and we are so important to them," said Middle East analyst and Gulf specialist Bill Law.
But the Qataris, Law said, have "good cause to feel aggrieved" given Britain’s response to the crisis, which "has been worse than pathetic in my opinion".
"As much as Theresa May thinks that she can do free-trade deals with Gulf states, the Qataris may think: 'Where were you when we needed you?'" Law said.
While a free-trade deal with the GCC, whatever the make-up of the GCC at that point, may not be in danger, British companies and those transiting financially through London will be worried that there could be "more pressure to try to discourage them from doing business in Qatar, as well as the other countries," Ziemba said.
Even if the GCC formally stays together or a reconciliation happens tomorrow, these pressures might still arise - and that’s arguably why British officials have "been slow to say much," she said.
It's unlikely that the countries involved would divest from the UK purely for political reasons related to the crisis, analysts say. However, the crisis could impact conditions – lower oil prices and therefore less savings, for example – that could make asset sales attractive.
"The most meaningful driver of asset allocation decisions from these dynamics will be around whether the countries need the resources elsewhere, rather than a political decision," said Ziemba.
For the UK, looking on while some of its major investors fight it out in the Gulf, it is certainly awkward, but there is also scope for opportunity, Law said.
"This is an opportunity for Britain if they have the nous to take it up, which is to have a conversation with the Saudis and to have a conversation with the Emiratis and try to move beyond this escalation confrontation," Law said. "That would pay well down the road."