Sheikh Hamad maintained close ties with the United States, which for decades has flown warplanes from a major military base in Qatar.
Oil futures traded lower on Monday (5 June), after several Arab nations led by Saudi Arabia cut diplomatic ties with Qatar accusing it of "adopting various terrorist and sectarian groups aimed at destabilising the region including the Muslim Brotherhood Group, Daesh (ISIS) and Al-Qaeda".
The four countries said 'Qatar adopted terror organizations which intend to harm the region's stability'.
The UAE said that in a statement it will "sever relations with Qatar, including diplomatic relations, and the country's diplomatic mission has a grace period of 48 hours to leave the country", UAE state news agency WAM reported.
A Reuters report said Saudi Arabia also banned Qatar Airways from using its air space resulting in the suspension of all QA flights to the kingdom. Its Gulf Arab neighbors responded by blocking Qatari-based media, including Al-Jazeera.
"Our flights to and from Doha are operating as per schedule", Jet Airways said in a tweet.
Meanwhile in a statement carried by its official news agency, Bahrain accused Qatar of backing terrorism and interfering in Bahrain's internal affairs. Saudi Arabia also said it would shut its land border with Qatar, effectively cutting off Qatar from the rest of the Arabian Peninsula.
The diplomatic bust-up threatens the global prestige of Qatar, which has a large US military base and is set to host the 2022 soccer World Cup.Soccer's governing body Federation Internationale de Football Association said on Monday it was in "regular contact" with Qatar's 2022 organising committee but did not comment directly on the diplomatic situation.
Brent crude fell almost 1 percent on concerns that the cutting of ties with Qatar could hamper a global deal to reduce oil production.
The coordinated move dramatically escalates a dispute over Qatar's support of the Muslim Brotherhood, the world's oldest movement, and adds accusations that Doha even backs the agenda of Iran. It has been criticised in some quarters for its support of rebel groups fighting Syrian President Bashar al-Assad, and Qatari individuals have also been sanctioned by the US Treasury for activities.
Chairman of the Iranian Parliament's Foreign Policy and National Security Commission Alaeddin Boroujerdi has held U.S. President Donald Trump's recent visit to Saudi Arabia, and its interventions responsible for current diplomatic tensions among gulf countries of the region.
The head of Iran's Agricultural Products Exporters Union Seyyed Reza Noorani said the Islamic Republic is ready to export various types of agricultural and food products to Qatar through three Iranian port cities.
Premier UAE airlines Etihad and Emirates announced they would suspend flights to Qatar, as did budget carriers Air Arabia and FlyDubai.
Saudi Arabia's Ports Authority notified shipping agents on Monday not to receive vessels carrying Qatari flags or ships that are owned by Qatari companies or individuals. The Qatar Stock Exchange fell 7 percent. The UAE also accused Qatar of "harbouring extremists".
In a sign that this latest spat may not blow over easily, Saudi Arabia has recently tried to undermine the Qatari emir's claim that he's a descendant of the founder of Wahhabi branch of Islam.