In a report released Friday, Moody’s said the affirmation reflects Saudi Arabia’s “large and wealthy economy,” supported by vast hydrocarbon resources, low production costs, and a strong competitive position in global energy markets, alongside improving institutional effectiveness and economic policymaking.
The agency said its baseline scenario assumes a “significant and prolonged disruption” to trade flows through Hormuz, but without major additional damage to Saudi energy infrastructure.
According to Moody’s, the kingdom’s ability to redirect most crude exports through the Red Sea, combined with strong government financial assets, was a key factor behind maintaining the stable outlook.
Moody’s noted that the closure of the Strait of Hormuz since early March has reduced Saudi oil production and exports below pre-war levels. However, higher crude prices have more than compensated for the decline in volumes.
The agency expects oil prices to average between $90 and $110 per barrel during 2026.
Saudi Arabia has relied heavily on its East-West pipeline to reroute crude exports from Gulf facilities to Red Sea ports, allowing the country to sustain large portions of its export capacity despite maritime disruptions.
According to Moody’s, the pipeline is already transporting roughly 7 million barrels per day, while Red Sea ports have managed to load up to 5 million barrels daily, equivalent to nearly two-thirds of pre-war export levels.
As a result, the agency expects Saudi government revenues in 2026 to exceed pre-war forecasts, giving authorities greater flexibility to increase spending on economic support programs and defense.
Despite higher government expenditure, Moody’s expects Saudi Arabia’s fiscal and external positions to improve, with government debt remaining moderate at around 32% of GDP in 2026, broadly in line with similarly rated sovereigns.
Moody’s said continued progress under Saudi Vision 2030 has strengthened non-oil growth through public investment, structural reforms, and improving fiscal transparency.
The agency expects those trends to continue in the coming years.
Saudi Arabia’s strong balance sheet, manageable debt burden, and sizable government financial assets continue to support the kingdom’s credit profile, Moody’s said.
The agency also described Saudi Arabia’s non-oil economy as “relatively resilient,” supported by sustained government spending and continued operation of key logistics infrastructure, particularly container ports along the Red Sea that have helped preserve trade flows during the conflict.
Moody’s expects reforms tied to Vision 2030 to support private-sector non-oil growth rates of between 4% and 5% after the war subsides, driven by continued public investment and expanding private-sector participation.
The ratings agency forecast Saudi Arabia’s real GDP to contract by around 1.7% this year due to a roughly 10% decline in hydrocarbon production.
However, Moody’s expects the economy to rebound sharply in 2027, with growth accelerating to nearly 8% as trade flows through Hormuz gradually recover and oil production increases.
Recent economic data suggests Saudi Arabia has absorbed the initial shock of the Iran conflict more effectively than many other economies exposed to the crisis.
The kingdom’s economy grew 2.8% year-on-year during the first quarter of 2026, the slowest pace since mid-2024 but still positive despite severe disruptions in one of the world’s most important energy corridors.
Analysts attributed the resilience partly to the rapid activation of Saudi Aramco’s East-West pipeline infrastructure and government measures aimed at sustaining private-sector demand.
Earlier this year, S&P Global Ratings also affirmed Saudi Arabia’s sovereign rating at A+ with a stable outlook, citing the kingdom’s ability to redirect exports to the Red Sea, large crude-storage capacity, and expected recovery in oil production after the conflict.
Meanwhile, inflation in Saudi Arabia slowed to 1.7% year-on-year in April from 1.8% in March, bucking global inflationary trends caused by higher energy prices and supply-chain disru
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