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S&P: Saudi Arabia’s Robust Economy Guarantees its Ability to Withstand Regional Conflict

King Abdullah Financial District in Riyadh (Asharq Al-Awsat)
King Abdullah Financial District in Riyadh (Asharq Al-Awsat)
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S&P: Saudi Arabia’s Robust Economy Guarantees its Ability to Withstand Regional Conflict

King Abdullah Financial District in Riyadh (Asharq Al-Awsat)
King Abdullah Financial District in Riyadh (Asharq Al-Awsat)

Credit ratings agency S&P Global affirmed Saudi Arabia’s sovereign credit rating at “A+/A-1,” with a “stable outlook” on Friday.

The agency said that the Kingdom was well-positioned to withstand the ongoing conflict in the Middle East.

S&P stated in a press release that “the outlook reflects the Kingdom’s ability to redirect oil exports to the Red Sea port via the East-West oil pipeline, utilize its large oil storage capacity, and its ability to increase oil production post-conflict.”

It noted that “the outlook also reflects our view that non-oil growth momentum and associated non-oil revenues, as well as the government’s ability to calibrate investment expenditure tied to Vision 2030, should support the economy and fiscal trajectory.”

S&P forecast real GDP growth of 4.4% for 2026, saying real GDP growth will average 3.3% per year for 2027-2028.

It said the government diversifying away from oil, economic volatility is starting to decrease--albeit sensitivity to oil remains. “The non-oil sector (including government activities) now accounts for about 70% of GDP, up from 65% in 2018. This structural shift is a key objective of Vision 2030,” the agency noted.

It added that “Saudi Arabia’s substantial asset position should remain a key strength over our forecast period even as gross debt rises.”

The ratings agency noted that before the conflict, the government in Riyadh had already been looking at adjusting spending on diversification projects tied to Vision 2030 to manage plans more in line with available resources.

Saudi Arabia's Vision 2030, the Kingdom's “long-term transformation” plan, has a fiscal policy that is expansive to encourage economic diversification. This has been done despite oil price volatility which has put pressure on public finances.

The agency said: “We expect the authorities will continue to adopt a prudent and flexible approach in this regard, having stressed a commitment to achieving Vision 2030 goals without jeopardizing public finances.”

The US and Israeli war on Iran is causing the Strait of Hormuz to be close to shutting down, forcing regional producers to reduce oil output.

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Business

European Shares Slip as Hopes for US-Iran Peace Fade

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, April 17, 2026. (Reuters)
The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, April 17, 2026. (Reuters)
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European Shares Slip as Hopes for US-Iran Peace Fade

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, April 17, 2026. (Reuters)
The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, April 17, 2026. (Reuters)

European ‌shares declined on Monday, as hopes for peace in the Middle East ebbed with tensions reigniting after Washington seized an Iranian cargo ship that tried to run its blockade and Tehran vowed to retaliate.

Investors have grown increasingly jittery as the US-Iran ceasefire, set to expire Tuesday, appears fragile.

Iran rejected fresh peace talks with the US just hours after President Donald Trump said he would dispatch envoys to Pakistan ‌while threatening new ‌strikes unless Tehran accepts his terms.

The ‌pan-European ⁠STOXX 600 index ⁠was down 0.8% to 621.52 points as of 0717 GMT.

Major regional markets also fell, with France's CAC and Germany's DAX down 0.9% and 1%, respectively.

The uncertainty marks a sharp reversal from Friday's optimism, when the STOXX 600 jumped more than 1% and ⁠secured its fourth consecutive weekly gain after ‌Iran declared the Strait ‌of Hormuz open.

Energy shares gained 1.9% as crude prices ‌surged., while utilities and telecommunication stocks rose 0.7% and 0.2%, ‌respectively.

Travel and leisure sector led the declines, bearing, down 2%. Banks and automobile stocks dropped 1.8% each.

Among other movers, cash logistics company Loomis was top loser on the European ‌benchmark index after Goldman Sachs downgraded the stock to "neutral" from "buy".

The setback in the ⁠Middle ⁠East conflict comes despite tentative signs of normalization at the Strait of Hormuz.

Although Iran has reimposed a closure of the critical waterway, Kpler data revealed more than 20 vessels carrying oil, metals, gas, and fertilizer passed through on Saturday - the busiest traffic day since March 1.

Elevated oil prices continue to weigh heavily on energy-dependent European economies, keeping investors cautious.

The strait is a conduit for one-fifth of global energy shipments. Brent crude futures advanced 5.3% to $95.19 a barrel after tumbling 9% on Friday.

Business

Saudi Central Bank Governor Says National Model Has Shielded Economy from Shocks

Saudi Central Bank Governor Ayman Alsayari. (International Monetary Fund)
Saudi Central Bank Governor Ayman Alsayari. (International Monetary Fund)
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Saudi Central Bank Governor Says National Model Has Shielded Economy from Shocks

Saudi Central Bank Governor Ayman Alsayari. (International Monetary Fund)
Saudi Central Bank Governor Ayman Alsayari. (International Monetary Fund)

Saudi Arabia’s economy has emerged as a model of resilience and crisis readiness, Central Bank Governor Ayman Alsayari said, citing steady progress under the Kingdom’s Vision 2030 reform agenda.

He stressed that continued implementation of the plan has helped protect the economy from regional shocks, underpinned by solid growth, contained inflation and prudent monetary and fiscal policies.

This strength, he noted, reflects decades of structural reforms and strategic investment in infrastructure and institutions, equipping the Kingdom with the capacity and flexibility to absorb shocks while sustaining investor and consumer confidence.

Addressing the International Monetary and Financial Committee of the International Monetary Fund, chaired by Saudi Finance Minister Mohammed Al-Jadaan, Alsayari highlighted the importance of Saudi Arabia’s diversified energy and trade infrastructure in maintaining supply flows under pressure.

He pointed to long-term investments such as the East-West pipeline, which runs to Red Sea ports in Yanbu, describing it as a vital artery for both Saudi exports and global energy supplies.

The ability to reroute exports and secure access to Red Sea ports and strategic facilities, he said, underscores the importance of long-term planning in preventing supply disruptions.

It also reinforces the need to treat energy security as integral to global financial stability, while avoiding policies that sideline the role of fossil fuels in sustaining trade and growth.

Alsayari warned that the war in the Middle East poses a serious test for the global economy and could revive conditions reminiscent of the stagflation era of the 1970s.

He welcomed progress on the “Diriyah Guiding Principles,” describing them as a milestone in efforts to reform IMF governance after nearly two decades of stagnation. The principles, reflecting the Diriyah Declaration, combine realism and ambition and provide a basis for strengthening the fund’s representation of the global economy.

Alsayari said that the step is essential to enabling the IMF to carry out its core functions in surveillance and lending, while keeping pace with technological shifts such as artificial intelligence and digital assets, and safeguarding the international monetary system against geopolitical risks and stagflation.

Saudi Arabia is translating its economic gains into tangible international support, including a $279 million pledge for IMF capacity development and the opening of a regional office in Riyadh to strengthen cooperation with countries in the region and beyond, Alsayari added.

He also cited platforms such as the AlUla Conference on Emerging Market Economies as tools to share expertise and advance reforms that support resilience and long-term growth.

Business

IEA Proposes Building Iraq-Türkiye Pipeline to Bypass Hormuz

A general view of oil tanks at Türkiye's Mediterranean port of Ceyhan, February 19, 2014. (Reuters)
A general view of oil tanks at Türkiye's Mediterranean port of Ceyhan, February 19, 2014. (Reuters)
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IEA Proposes Building Iraq-Türkiye Pipeline to Bypass Hormuz

A general view of oil tanks at Türkiye's Mediterranean port of Ceyhan, February 19, 2014. (Reuters)
A general view of oil tanks at Türkiye's Mediterranean port of Ceyhan, February 19, 2014. (Reuters)

International Energy Agency Executive Director Fatih Birol proposed building a new oil pipeline linking Iraq’s Basra oil fields and Türkiye’s Mediterranean oil terminal in Ceyhan to bypass the Strait of Hormuz, according to Turkish newspaper Hürriyet.

“I believe a Basra-Ceyhan pipeline could be extremely attractive and a very important project for both Iraq and Türkiye, as well as for regional supply security, especially from Europe’s perspective,” Birol said in an interview with the newspaper.

“I also believe the financing issue can be overcome. Now is exactly the right time.”

He said, “The vase has been broken once, and it is very difficult to fix,” referring to the Strait of Hormuz.

A new oil pipeline “is a necessity for Iraq and an opportunity for Türkiye. It is also a major opportunity for Europe in terms of supply security. I think this should be considered a strategic project,” Birol added.

The war on Iran has disrupted shipping through the Strait of Hormuz, the strategic choke point through which 20% of the world’s oil supply flows, bringing global economic pain in the form of higher prices for gasoline, fertilizer and other staples.

Iraq and Türkiye share the Kirkuk-Ceyhan pipeline, a strategic corridor for transporting crude oil from northern Iraq to the Turkish port of Ceyhan, which began operation in 1976.

Iraq is seeking to rehabilitate the pipeline to overcome export problems, proposing to establish a new line from Basra to Ceyhan as a safe alternative to the Strait of Hormuz and to boost European energy security. On Sunday, Birol suggested building the new line.