S&P confirms Qatar's credit rating, expecting'sizable assets' to mitigate Iran War impact
S&P Global Ratings, a credit rating agency, maintained Qatar's sovereign rated at 'AA/A-1+ on Friday. It expects the country's "substantial accumulated fiscal assets and external assets" will help 'cushion' the impact of 'the U.S. - Israel war on 'Iran.
S&P stated that "despite the regional conflict and the impact it has had on gas production, we continue to support our ratings for Qatar due to the large external and fiscal net assets stock positions of the country, which are supported by money in the Qatar Investment Authority and the sovereign wealth fund."
The?Iran?war, which has been going on for two months, has caused a disruption in shipments along the world's main oil artery - the?Strait of Hormuz. This is the conduit that carries about 20% of the global supply of oil and LNG.
In March, Qatar declared force majeure for some of its LNG output following a series of?Iranian airstrikes that destroyed the infrastructure at Ras Laffan's giant LNG hub. This could take five years to restore 17% of Qatar’s LNG production capacity.
S&P stated on Friday that it expects Qatar’s economy to 'contract by around 5% in real term in 2026 as LNG production has fallen below pre-war levels, and the spillover effects of the war have hit non-hydrocarbons sectors such as?trade and manufacturing, and?hospitality.
Last month, the IMF said that Qatar was one of the Gulf economies that is expected to contract this year.
S&P maintained Qatar's outlook as'stable'.
The agency anticipates that regional conditions will gradually stabilize, and that trade through the Strait of Hormuz will resume in the second half of 2026.
In March, the peer agency?Fitch placed Qatar's sovereign "AA" rating on Rating Watch as "Negative", citing concerns over Qatar's post-Iran War security environment.
(source: Reuters)
