A couple of weeks ago, while we were all being distracted by the UK election, an unusual conflict flared up in the Gulf.
Saudi Arabia, Egypt, Bahrain and the United Arab Emirates severed diplomatic ties and transport links with Qatar.They haven't reinstated them yet.
Why have they done it, and is it something the rest of us need to worry about?
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Let's have a look...
Qatar: as wealthy as Switzerland, but not quite as neutral
It has the world's third-largest natural gas reserves and oil reserves. It isthe world's biggest liquefied natural gas exporter, something that has enabled it to build a $335bn sovereign wealth fund the Qatar Investment Authority.
The country is behind the media network Al Jazeera. In 2022, it will become the first Arab country to host the World Cup. Qatari money owns trophy assets all across Europe and the UK Harrods and the Shard in London, for example.It also hosts a US military base.
So it's a powerful, influential place.And it's not afraid of using that influence. Qatar has always tried to present itself as a neutral player a calm mediator in a very volatile area.But as the FT puts it, the reality is that Qatar has long been viewed as "a regional maverick that pursues its own agenda".
That seems to be a polite way of saying that Qatar is happy to support or turn a blind eye to groups that both its local allies and the West regard as terrorists, or to back sides in the Arab Spring, Libya and Syria conflicts that its neighbours oppose.
So far, they all seem to have put up with that (although tension has been growing since at least 2014). And as Gideon Rachman points out in the FT, it's not as though Qatar is the only wealthy Gulf state to export unhelpful ideology around the world while at the same time denouncing terrorism.
The real issue appears to be Qatar's relationship with Iran.I'm not an expert on the geopolitics of the area (whether such a thing exists is a valid question) but the big conflict in the region is basically between Iran and Saudi Arabia it's like a mini-version of the Cold War.
Qatar shares a gasfield with Iran, so unsurprisingly, it takes a more neutral view of the country than some of its allies.The problem with that is that you can't be neutral and also be trying to play one side off against the other.
Qatar is also a small nation in a volatile area. It's a peninsula, jutting out into the Persian Gulf. Its only land border is with Saudi Arabia and that makes it geographically rather vulnerable.
A couple of things seem to have precipitated the current stand-off. Firstly, Qatar paid as much as $1bn to Iran-backed groups to secure the release of a group of Qataris who were taken hostage in Iraq last year.
Secondly, US president Donald Trump appeared to give the Saudis the green light to act when he visited the region last month although, confusingly,the US relationship with Qatar remains strong. As Reuters points out, less than a week after Trump called Qatar "a funder of terrorism at a very high level", the US sold it $12bn-worth of warplanes.
In any case, as a result, two weeks ago, Saudi Arabia, Bahrain, Egypt and the United Arab Emirates cut diplomatic ties and transport links with Qatar. Saudi Arabia cited its support for "terrorism and extremism" as the reason for the cut-off.
And thus far, there's been no progress on ending the dispute.
How could this affect your portfolio?
The closing of the land border has had an effect on Qatar's food supplies, although Iran has offered to help, as has Turkey. It also won't be great news for preparations for the Word Cup, if you care about that sort of thing. But by and large it has found alternative routes for everything, and the move hasn't affected its crucialnatural gas exports.
The reality is that, unless you had money in the Qatari stockmarket or its currency, there is not much specific short-term effect on your portfolio.What is trickier is the long-term question.
Turmoil in the Middle East is nothing new, but this is a big dispute between countries in the region that are largely stable and wealthy (Egypt doesn't quite fit that bill, but it's still among the more open nations).
On the economic side, if the dispute continues, borrowing costs for the countries involved could rise. That's not ideal timing, given that the weakness in oil prices is also putting financial pressure on most of these countries.Capital flight from the region could be helpful for UK stocks and high-end property after all, the Qataris already own plenty of London but that would probably only offset the effect of rising instability in the region.
There's also the question of escalation. Qatar still has powerful allies in the region. For example, it held war games with Turkey yesterday. And it's still close to the US (just as Saudi Arabia is). You have to hope that with the US on both sides, this can be sorted out with words rather than anything more drastic. That said, it's a powder keg. And Turkey is hardly the most stable place right now either. So that's definitely something to monitor.
But for the moment, probably the most interesting thing is the virtually non-existent effect the dispute has had on oil prices. It suggests that the sheer weight of supply is overwhelming any jitters over geopolitics or hopes for a rebound. The big question, I suppose is: is the market overly gloomy or could oil challenge the $30 a barrel mark again soon?We'll have a look at that in more detail later this week.
