Canada 'will not cancel' Saudi arms deal, despite mass executions: Dion

Among those expressing their anger against Saudi Arabia are Shi'ite Muslims in Iraq.

The militant group, which has claimed responsibility for attacks in the kingdom and stepped up operations in neighbouring Yemen, singled out the al-Ha'ir and Tarfiya prisons where many al-Qaeda and Islamic State supporters have been detained.

Several of Saudi Arabia's Sunni allies have broken diplomatic ties with Iran after demonstrators ransacked the Saudi embassy in Tehran.

The United Arab Emirates downgraded relations with Iran.

It came as the crisis between Tehran and Riyadh over the execution of a prominent Shia cleric showed little sign of abating.

Smoke rises as Iranian protesters set fire to the Saudi embassy in Tehran.

"Though we would argue that the likelihood of Saudi Arabia ceding market share to incremental Iranian oil in 2016 was remote at best, the tension is likely to lead Saudi to dig in its heels to keep output at or even above current levels".

The United Nations has urged both sides to reduce tensions.

We reaffirm our calls on the Government of Saudi Arabia to respect and protect human rights and to ensure fair and transparent judicial proceedings in all cases.

The escalation in Arab capitals comes despite Rouhani's earlier condemnation of the attacks and Tehran's pledge to "take necessary measures to prevent the occurrence of similar incidents in the future".

"It is not the moment for the Iranians to detonate mines in the Gulf" region as they await an effective lifting of sanctions and are about to start exporting oil again, said the diplomat.

Qatar's foreign ministry called the embassy attack a "violation of global charters and norms that ensure the security and protection of diplomatic missions and their members".

De Mistura is also expected in Iran later this week and in Damascus on Saturday, UN sources said.

"Saudi Arabia is trying to cover up its defeats and domestic problems by creating tension in the region", Rouhani said in a speech broadcast on Iranian state television on Wednesday. However, the minister said Riyadh did not need help.

The diplomatic dispute, he adds, could be in part an attempt to shift geopolitical alliances as a way to manipulate potential conflict resolutions to be more favorable to maintaining or growing Saudi power.

In eastern Saudi Arabia, where al-Nimr agitated for greater political rights for Shiites in the Sunni-ruled kingdom, three days of mourning over his death were to end Wednesday night.