Home Energy Oman, Bahrain seen vulnerable to downgrades if the coronavirus outbreak drags on:...

Oman, Bahrain seen vulnerable to downgrades if the coronavirus outbreak drags on: S&P Global

Potential rating downgrades

However, with regard to sovereign rating downgrades in the pipeline due to the coronavirus, Gill pointed to Middle Eastern economies instead of China.

If the outbreak continues beyond March, the loss of oil demand could really affect prices, which are a “major budgetary parameter” for Gulf countries, he said, noting that the governments are already spending beyond their means.

“If you exclude the investment proceeds from the sovereign wealth funds, every single Gulf economy is running pretty substantial underlying fiscal deficits,” he added.

“You have pretty high breakeven oil prices,” he said, singling out Oman and Bahrain. “They do stand out.”

According to IMF data released in October 2019, Oman’s fiscal breakeven oil price is projected to be $87.60 a barrel in 2020, while Bahrain’s is expected to be $91.80 a barrel. 

On Wednesday in Asia, oil prices were slightly higher. Brent crude was trading at $58.12 a barrel, up 0.64%, while U.S. West Texas Intermediate crude traded around $52.46 a barrel, up 0.79%.

S&P Global Ratings also wrote in a report that Oman has high export exposure to China at 21.7% of its GDP.

However, Bahrain is “working very hard” to diversify and find non-oil revenues, he said. “But they are where they are in terms of regional exposures, and the key export of this part of the world is clearly crude oil.”

– CNBC’s Sam Meredith contributed to this report.


Please enter your comment!
Please enter your name here

Must Read

Astronauts conduct second Chinese space station spacewalk

HELSINKI — Chinese astronauts Nie Haisheng and Liu Boming embarked on a second Shenzhou-12 spacewalk late Thursday to carry out work on a space...

Space Force awards $32 million in contracts to startups and small businesses

Of 24 companies that competed at the Space Force Pitch Day, 19 were selected for SBIR Phase 2 awards WASHINGTON — At a virtual...

PNT alternatives champion open-market approach

TAMPA, Fla. — Competing positioning, navigation, and timing (PNT) companies are joining forces to accelerate efforts to back up global navigation satellite systems (GNSS). The...

Space Force to establish new command in Colorado focused on training and education

STARCOM is the third and final field command being stood up by the Space Force WASHINGTON — The U.S. Space Force on Aug. 23 will...

Single molecules keep to the straight and narrow – Physics World

Precisely sending and receiving single molecules. Courtesy: L Grill A change in the position of a single molecule can determine the outcome of a chemical...