RIYADH, Saudi Arabia, Oct. 1, 2019 /PRNewswire/ — Over the past week, major Rating Agencies have released updated credit views on Saudi Arabia in response to the attacks of September 14th highlighting the Kingdom's broad-based resilience. This is not only a reflection of the country's economic and fiscal strengths but most importantly a demonstration of its institutional capacity to stage an immediate and effective response to an external shock. Moody's has made no changes to the rating, while Fitch downgraded the Kingdom's rating to A with a stable outlook.
The international community has responded positively to the resilience and reliability shown by Saudi Aramco and the Kingdom in ensuring that there were no interruptions to global oil supplies. This reinforces the world-class operational excellence and crisis management skills of the company.
Saudi Arabia's oil supply is fully back online after the attacks halved output and the Kingdom has reached 11.3 million barrels per day (bpd) capacity and will reach 12 million bpd by the end of November. Oil supply is set to recover to 9.89 million bpd in October and Saudi Arabia, the world's largest oil exporter, will meet all customer oil commitments this month.
Considering the above, the Ministry of Finance is disappointed that Fitch took a swift decision to downgrade the Kingdom. Rather, the event highlights Saudi Arabia's outstanding capacity to effectively deal with adversities, commitment to maintaining stability in the global oil markets, and the Kingdom's status as an important international ally. As such, the downgrade of the rating comes across as somewhat speculative without direct reference to the swift, decisive and effective response to the event.
Since the event the Kingdom has illustrated restraint and careful consideration in its response, which should act as a reassurance for the international community. Any increase in unpredictability is as a direct action of aggressive actors within the region rather than the actions of the Kingdom.
Currently the budget deficit is well within the parameters we set for the 2019 Budget. Whilst we are committing to focused increased investment in key Vision 2030 areas, we are also improving our efficiency and effectiveness of that spending. We also have one of the strongest reserves in the world and the country's financial assets substantially exceed its liabilities.
Commenting on the rating the Ministry of Finance stated: "We do not believe that the actions of the country and the company in response to the event significantly impact on the risk factors mentioned in the report. In fact, the response and resilience of the company and the markets underline the reliable nature of the supply of oil for global markets from the Kingdom. We trust that as this continues to be the case the Agency will see fit to revise their decision in the light of continuing stability within the supply to markets and the reactions and actions of the market participants and commentators."
SOURCE The Ministry of Finance Saudi Arabia