Oil: Moody’s lowers rating of Oman and Bahrain – The Tribune.fr

Moody’s downgraded two Gulf countries, Oman and Bahrain, and placed the other oil-exporting countries in the monitoring region for a possible downward revision of its rating, the crude prices fall with weakened their economies. The downgrade “reflects the impact of the steady drop in oil prices” , a statement from the ratings agency released Friday night. The review of Moody’s regards Saudi Arabia, which has seen its rating downgraded two notches to A- last month, and the United Arab Emirates, Kuwait and Qatar.

The agency rating believes that the price of oil should be around $ 33 in 2016, $ 38 in 2017 and 48 dollars in 2019. the rating of Bahrain was lowered one notch to Ba1. Oil and gas account for 75% of exports and had between 2010 and 2014 to 86% of budget revenues of the State, which is a relatively small exporter, says Moody’s. For its part, Oman saw its rating lowered two notches to A1. For this country, oil and gas account for 90% of fiscal revenues. Oman is less financially solid, the amount of its financial assets representing only three years of spending, said the rating agency.

The drop in oil prices has deteriorated trade balances, economies and therefore the credit profiles of the Gulf states, according to Moody’s. In Saudi Arabia, oil now accounts for 84% of exports, 40% of gross domestic product (GDP) and 62% of consolidated budget revenues. Before the fall in oil prices, the revenues from black gold represented about 90% of these revenues. Between 2013 and 2015, the oil revenues of the Kingdom, as a percentage of GDP, fell 23%, while the budget balance moved from a surplus of 6.5% of GDP to a deficit of 15%. During the same period, the balance of current trade of Saudi Arabia has slid from a surplus of 18.2% of GDP to a deficit of 5.7%, says Moody’s.

The country of Gulf cooperation Council (GCC) have been forced to take austerity measures, including cutting their subsidies for energy to counter the decline in oil revenues. Moody stressed’s last month that these measures would help reduce the budgetary problems of these countries but would not be enough to erase born deficits of the oil price drop (AFP).