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Fitch Affirms Saudi Aramco at 'A+' with Stable Outlook

 Saudi Aramco logo (AFP)
 Saudi Aramco logo (AFP)
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Fitch Affirms Saudi Aramco at 'A+' with Stable Outlook

 Saudi Aramco logo (AFP)
 Saudi Aramco logo (AFP)

Fitch Ratings on Tuesday affirmed Saudi Aramco’s long-term issuer default ratings at “A+” for both foreign- and local-currency ratings, with a stable outlook.
In a statement, Fitch Ratings praised Aramco's sustainable dividend policy. It said the company delivered a sustainable and progressive base dividend of $81.2 billion in 2024.
“Saudi Aramco is one of the world's largest oil producers and Saudi Arabia's national oil company,” Fitch Ratings said. “Its financial profile benefits from strong pre-dividend free cash flow (FCF) generation and conservative financial policies.”
Also, Aramco’s business profile is characterized by large-scale production, vast reserves, low production costs and expansion into downstream and petrochemicals, the rating company noted.
According to Fitch Ratings, Saudi Aramco has the flexibility to reconsider its dividend commitment if oil prices fall or capex is higher than we currently assume.
It explained that Saudi Aramco’s rating reflects its large reserve and production base, and a robust financial profile characterized by strong profitability, liquidity and market access.

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Oil Prices Rise as Concerns Grow over Supply Disruptions

Oil Prices Rise as Concerns Grow over Supply Disruptions
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Oil Prices Rise as Concerns Grow over Supply Disruptions

Oil Prices Rise as Concerns Grow over Supply Disruptions

Oil prices climbed on Tuesday reversing earlier declines, as fears of tighter Russian and Iranian supply due to escalating Western sanctions lent support.

Brent futures were up 61 cents, or 0.80%, to $76.91 a barrel at 1119 GMT, while US West Texas Intermediate (WTI) crude climbed 46 cents, or 0.63%, to $74.02.

It seems market participants have started to price in some small supply disruption risks on Iranian crude exports to China, said UBS analyst Giovanni Staunovo.

In China, Shandong Port Group issued a notice on Monday banning US sanctioned oil vessels from its network of ports, according to three traders, potentially restricting blacklisted vessels from major energy terminals on China's east coast.

Shandong Port Group oversees major ports on China's east coast, including Qingdao, Rizhao and Yantai, which are major terminals for importing sanctioned oil.

Meanwhile, cold weather in the US and Europe has boosted heating oil demand, providing further support for prices.

However, oil price gains were capped by global economic data.

Euro zone inflation

accelerated

in December, an unwelcome but anticipated blip that is unlikely to derail further interest rate cuts from the European Central Bank.

"Higher inflation in Germany raised suggestions that the ECB may not be able to cut rates as fast as hoped across the Eurozone, while US manufactured good orders fell in November," Ashley Kelty, an analyst at Panmure Liberum said.

Technical indicators for oil futures are now in overbought territory, and sellers are keen to step in once again to take advantage of the strength, tempering additional price advances, said Harry Tchilinguirian, head of research at Onyx Capital Group.

Market participants are waiting for more data this week, such as the US December non-farm payrolls report on Friday, for clues on US interest rate policy and the oil demand outlook.