Fitch changes Saudi credit rating

Rating agency Fitch downgraded Saudi Arabia’s credit rating to A from A+ today, citing rising geopolitical and military tensions in the Gulf following an attack on its oil facilities and a deterioration of the kingdom’s fiscal position.

"In our view, Saudi Arabia is vulnerable to escalating geopolitical tensions given its prominent foreign policy stance, including its close alignment with U.S. policy on Iran and its continued involvement in the Yemen war," Fitch said.

It saw a risk that the United States and Saudi Arabia could be drawn into a deeper conflict with Iran or its allies. "Although oil production was restored fully by end-September, we believe that there is a risk of further attacks on Saudi Arabia, which could result in economic damage," Reuters cited the report as saying.

“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.

Fitch’s downgrade comes ahead of a planned issue of international Islamic bonds by the kingdom, and the rating move could potentially affect the cost of Saudi Arabia’s debt issue.