• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 4 days The United States produced more crude oil than any nation, at any time.
  • 4 days How Far Have We Really Gotten With Alternative Energy
  • 2 days Bad news for e-cars keeps coming
  • 4 days China deletes leaked stats showing plunging birth rate for 2023
  • 5 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
South Korea Warns Russia Over Military Pact with North Korea

South Korea Warns Russia Over Military Pact with North Korea

South Korea summoned Russian ambassador…

Equinor Fights NIMBY Feelings in New York Battery Storage Project

Equinor Fights NIMBY Feelings in New York Battery Storage Project

Equinor's proposed battery storage facility…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Fitch Raises Saudi Arabia’s Credit Rating Due To “Formidable” Foreign Reserves

  • Fitch has upgraded Saudi Arabia’s long-term foreign currency issuer default rating from an A to an A+.
  • Saudi Arabia has a much stronger debt-GDP ratio than many other sovereigns and its dependence on oil has fallen although remains high.
  • Its dependence on oil, weak World Bank governance indicators, and its vulnerability to geopolitical shocks are its main ratings weaknesses.
Saudi Arabia

Fitch Ratings on Wednesday upgraded Saudi Arabia's long-term foreign-currency issuer default rating (IDR) to 'A+' from 'A,' citing the Kingdom's strong fiscal position and "formidable" foreign reserves.

The outlook on the rating is "stable," said Fitch, which noted that the world's top crude oil exporter has a much stronger debt-to-GDP ratio than many other sovereigns, as well as significant fiscal buffers in the form of deposits and other public sector assets.  

"Saudi Arabia has one of the highest reserve coverage ratios among Fitch-rated sovereigns at 18 months of current external payments," the rating agency said.

Dependence on oil remains high, although it has fallen in the past decade. The high oil dependence remains a rating weakness for Saudi Arabia's economy, in addition to weak World Bank governance indicators and vulnerability to geopolitical shocks, Fitch noted.

Oil revenue is expected to account for around 60% of Saudi Arabia's total budget revenue in 2023-2024, but this share has dropped from 90% a decade ago. Oil GDP represents as much as 30% of total nominal GDP in the Kingdom, according to Fitch.

Last year, Saudi Arabia received as much as $326 billion in oil revenues, its biggest oil sales haul in the era of Crown Prince Mohammed bin Salman, although monthly revenues have been lower in recent months after oil prices slid to around $80 per barrel at the end of last year.

According to Fitch, a $10 per barrel move in oil prices would change the rating agency's budget forecast by just over 2% of GDP.

Saudi Arabia's budget is set to be close to balance this year, compared to a surplus of 2.5% last year, due to lower expected average oil price in 2023 ($85 a barrel per Fitch projections) and lower oil production. Those are expected to offset increased revenues from the non-oil sector. 

Saudi Arabia led a group of several major OPEC+ producers who announced on Sunday a surprise 1.66 million bpd cut in production between May and December this year as "a precautionary measure aimed at supporting the stability of the oil market."

By Tsvetana Paraskova for Oilprice.com


More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News