• 4 minutes Pompeo: Aramco Attacks Are An "Act Of War" By Iran
  • 7 minutes Who Really Benefits From The "Iran Attacked Saudi Arabia" Narrative?
  • 11 minutes Trump Will Win In 2020
  • 15 minutes Experts review Saudi damage photos. Say Said is need to do a lot of explaining.
  • 1 hour Let's shut down dissent like The Conversation in Australia
  • 2 hours One of the fire satellite pictures showed what look like the fire hit outside the main oil complex. Like it hit storage or pipeline facility. Not big deal.
  • 3 hours Saudi State-of-Art Defense System looking the wrong way. MBS must fire Defense Minister. Oh, MBS is Defense Minister. Forget about it.
  • 53 mins Trump Accidentally Discusses Technology Used In The Border Wall
  • 15 hours Drone attacks cause fire at two Saudi Aramco facilities, blaze now under control
  • 8 hours Donald Trump Proposes Harnessing Liberal Tears To Provide Clean Energy
  • 10 hours Ethanol, the Perfect Home Remedy for A Saudi Oil Fever
  • 8 hours Saudis Confirm a Cruise Missile from Iranian Origin
  • 12 mins Ethanol is the SAVIOR of the Oil Industry, Convenience Store Industry, Automotive Supply Chain Industry and Much More!
  • 7 hours Saudis Buying Oil From Iraq
  • 11 mins Hong Kong protesters appeal to Trump for support.
  • 24 hours China Faces Economic Collapse
  • 1 day Democrats and Gun Views
Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Premium Content

Saudi Arabia Loses Top Credit Rating from Moody’s

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:




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play