• 6 minutes Saudis Threaten Retaliation If Sanctions are Imposed
  • 11 minutes Can the World Survive without Saudi Oil?
  • 15 minutes Saudis Pull Hyperloop Funding As Branson Temporarily Cuts Ties With The Kingdom
  • 2 hours WTI @ $75.75, headed for $64 - 67
  • 23 mins The Dirt on Clean Electric Cars
  • 13 hours Saudi-Kuwaiti Talks on Shared Oil Stall Over Chevron
  • 3 hours Trump vs. MbS
  • 6 hours Uber IPO Proposals Value Company at $120 Billion
  • 5 hours Closing the circle around Saudi Arabia: Where did Khashoggi disappear?
  • 13 hours UN Report Suggests USD $240 Per Gallon Gasoline Tax to Fight Global Warming
  • 10 hours COLORADO FOCUS: Stocks to Watch Prior to Midterms
  • 6 mins EU to Splash Billions on Battery Factories
  • 7 hours U.N. About Climate Change: World Must Take 'Unprecedented' Steps To Avert Worst Effects
  • 55 mins Coal remains a major source of power in Europe.
  • 10 hours Nopec Sherman act legislation
  • 3 hours Poland signs 20-year deal on U.S. LNG supplies
Alt Text

Venezuela Has Officially Launched Its Oil-Backed Cryptocurrency

Venezuela has officially launched its…

Alt Text

Oil’s $133 Billion Black Market

With oil prices back on…

Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Trending Discussions

Saudi Arabia Loses Top Credit Rating from Moody’s

Mid-East Oil Production

Low oil prices continue to take a toll on oil producers in the Middle East. The latest sign of trouble comes from Moody’s Investors Service, which cut its credit rating for Saudi Arabia, Oman and Bahrain.

Saudi Arabia saw its credit rating slashed by one notch from Aa3 to A1, while Oman suffered a cut to Baa1 and Bahrain’s score was reduced to Ba2. For Saudi Arabia, the rate cut was the first from Moody’s since the ratings agency began tracking its credit more than two decades ago. But it joins the other two major ratings agencies, S&P and Fitch, which already knocked Saudi Arabia off its top perch earlier this year. Related: Falling Chinese Demand Could Intensify The Oil War

The Saudi government is in the midst of an austerity campaign, cutting spending to reduce a $100 billion budget deficit. It has also gone to the bond markets to raise funds from international lenders, successfully borrowing $10 billion in March.

Moreover, in order to address the weakening economy while still maintaining the stability of its currency, the central bank has burned through over $155 billion in cash reserves since 2014, pushing its reserves below $600 billion as of March. Moody’s expects the cash reserves to continue to decline for the next several years, falling to just $460 billion by 2019.

“A combination of lower growth, higher debt and smaller domestic and external buffers leaves the kingdom less well positioned to weather future shocks,” Moody’s said on May 14. Related: Oil Markets Balancing Much Faster Than Thought

That assessment is exactly why the powerful Deputy Crown Prince Mohammed bin Salman is working on a major overhaul of the Saudi economy. The “Vision 2030” calls for new sources of non-oil revenue, privatizing part of Saudi Aramco, and using the proceeds to seed a $2 trillion sovereign wealth fund that will make investments in a diversified economy.

Moody’s said that these measures would improve the country’s creditworthiness, but that since the plans are still in the early stages, the “impact remains unclear.”

By Charles Kennedy of Oilprice.com

More Top Reads From Oilprice.com:


x


Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News