Global credit rating agency Fitch confirmed that most Gulf countries hold significant government assets, providing strong financial buffers in the event of a temporary decline in energy revenues.
She explained that geopolitical risks are already included in credit assessments. This gives some countries additional breathing room in the face of short-term shocks.
The agency reported that the sovereign ratings of Gulf Cooperation Council countries have sufficient headroom to withstand a short period of regional conflict without further escalation.
The report said its base scenario assumes that the Strait of Hormuz will be effectively closed during the conflict, due to security risks and insurance issues, among other reasons, and that tensions will last less than a month.
Soaring crude oil prices
The agency suggested that Saudi Arabia and the UAE have pipelines that could divert the bulk of their exports away from the strait, and that exporting countries maintain oil reserves outside the region.
He noted that higher oil prices could partially offset the impact of a short-term interruption in exports, as long as shipments continue to reach the market.
It is worth noting that, in addition to large volumes of liquefied natural gas, the Strait of Hormuz also carries more than 20 million barrels of oil and refined products per day, making it an important route for Gulf energy exports.
Global credit rating agency Fitch acknowledged that most Gulf countries own significant sovereign assets, providing strong financial buffers in the event of a temporary decline in energy revenues.
It becomes clear that geopolitical risks are already factored into credit assessments, giving some countries additional headroom to deal with short-term shocks.
The agency reported that the sovereign ratings of Gulf Cooperation Council countries have sufficient headroom to withstand short-term regional conflicts that do not escalate further.
The report said the baseline scenario assumes that the Strait of Hormuz will be effectively closed during the conflict, due to security risks and insurance issues, and that tensions will last less than a month.
Rise in crude oil prices
The agency suggested that Saudi Arabia and the UAE have pipelines that allow the bulk of their exports to be diverted through the strait, and that exporting countries maintain oil reserves outside the region.
The report noted that higher oil prices could partially offset the impact of short-term export interruptions, as long as shipments continue to reach the market.
It is worth mentioning that in addition to large volumes of liquefied natural gas, more than 20 million barrels of oil and refined products pass through the Strait of Hormuz every day, making the Strait of Hormuz an important route for Gulf energy exports.
