On Monday, credit rating agency Fitch said that the Gulf states’ government finances could get hurt by the collapse of oil prices.
Depending on the country, the USD10 fall in crude prices would lower fiscal revenues in the Gulf countries by 2-4% of the gross domestic product (GDP). All Gulf countries need a Brent price of well above USD35/barrel to get the fiscal breakeven prices.
Analyst Jan Friedrich said that for Bahrain, Oman, and Saudi Arabia, the breakeven price would be above USD80/barrel. However, the higher-rated sovereigns such as Kuwait, Qatar, and UAE possess ample buffers, mostly in the form of sovereign wealth funds.
