waltermasoni
Caribbean Trader
Saudi Arabia 'A-/A-2' Ratings Affirmed; Outlook Stable
- 26-Mar-2020 17:04 EDT
- Table of Contents
- At the March 6 OPEC meeting, Saudi Arabia and Russia and other OPEC members did not reach agreement on continued oil supply restrictions, leading to the collapse of the OPEC+ supply constraint agreement from April 1, 2020.
- The prospect of a large supply increase, alongside lackluster demand tied to the COVID-19 pandemic, led to a sharp fall in global oil prices, which will see a sharp rise in Saudi Arabia's fiscal deficit in 2020, albeit narrowing thereafter.
- Our estimate of Saudi Arabia's strong net asset (stock) position on both its fiscal and external balances continues to be a key ratings support, but prolonged low oil prices will erode its net asset stock and begin to put pressure on the ratings.
- We are affirming our 'A-/A-2' long- and short-term sovereign credit ratings on Saudi Arabia, with a stable outlook