Fitch Ratings announced on Friday that it is removing Qatar from its Rating Watch Negative list while maintaining the country’s AA sovereign credit rating, even as the conflict involving the US and Israel against Iran continues and the Strait of Hormuz remains blockaded.
The global ratings agency said the decision reflects a decrease in risks to Qatar’s liquefied natural gas (LNG) infrastructure since March. Qatar, one of the world’s top gas exporters, has nevertheless endured export disruptions and shortages linked to damaged energy facilities during the six-month-old war with Iran.
Despite the downgrade removal, Fitch maintained a negative outlook on the rating, warning that uncertainties around the flow of gas exports through the blockaded Strait of Hormuz persist. “The impact of the war on the credit profile will take longer to discern,” the agency stated.
Earlier this year, rival credit rating agencies S&P Global Ratings and Moody’s also affirmed Qatar’s sovereign ratings, pointing to the nation’s substantial financial reserves as a buffer against the war’s economic fallout.
Finally some good news for Qatar’s energy sector. The LNG infrastructure risks definitely eased since March.
But can we really trust Fitch’s ‘negative outlook’? The Hormuz blockade is still ongoing—what happens if things escalate again?