S&P downgraded Saudi Arabia due to low oil prices

The Agency lowered its ratings on Saudi Arabia by two notches from A+ to A-. In addition to Saudi Arabia, the downgrade due to oil prices touched two Gulf countries — Oman (from BBB+ to BBB-) and Bahrain (from BBB – to BB).

In S&P consider that the agreement concluded on 16 February, the energy Ministers of Russia, Saudi Arabia, Qatar, and Venezuela to freeze oil production at the January level, not significantly affect oil prices. According to the forecast of the Agency, in 2016 the price of a barrel would be about $40 with the prospect of growth to $50 by 2018.

The Agency points out that in the previous report on Saudi Arabia, which was published in October last year, the forecast for the price of a barrel for 2016 was $55, at 2018 — $70.

While low energy prices did not affect the sovereign rating of Qatar stored at AA. The experts noted that despite the expected lower earnings from oil and gas production, the authorities were able to prioritize and bet on the most important projects, as well as on investment in infrastructure, medicine and education. According to the Agency, Qatar will be able to follow projects to a successful conclusion to the world Cup, to be held in that country in 2022.