Fitch downgrades Saudi credit rating over military tensions

DUBAI (AFP) – Fitch Ratings on Monday downgraded Saudi Arabia’s credit rating by one notch, citing “rising geopolitical and military tensions in the Persian Gulf region” after unprecedentedly large attacks on the kingdom’s oil industry.

The agency said in a statement it had lowered oil-rich Saudi Arabia’s long-term foreign currency issuer rating from A+ to A, with a stable outlook.

Drone and missile attacks on September 14 on two key facilities, the Khurais oilfield and the world’s largest oil processing plant at Abqaiq, knocked out half of Saudi production.

“We have revised our assessment of the vulnerability of Saudi Arabia’s economic infrastructure to regional military threats as a result of the most recent attack,” Fitch said.

In a statement, the Saudi finance ministry criticised the downgrade, saying it did not reflect the kingdom’s quick restoration of oil output after the attacks, and it urged Fitch to reverse its decision.

Quoted by the official Saudi Press Agency, the ministry said that it was “disappointed that Fitch took a swift decision to downgrade the kingdom”.

The September 14 attacks and aftermath instead “highlights Saudi Arabia’s outstanding capacity to effectively deal with adversities… (and) commitment to maintaining stability in the global oil markets,” it said.

The Saudi statement said that the kingdom has restored crude supplies to pre-attack levels and restored production capacity to 11.3 million barrels per day, with plans to reach full capacity of 12 million bpd in November.

“The downgrade of the rating comes across as somewhat speculative without direct reference to the swift, decisive and effective response to the event,” the ministry said.