Fitch Ratings Agency announced that the long-term credit rating of the State of Qatar in foreign currency was fixed at the level of “AA” with a “stable” outlook. The agency attributed this classification to the strength of the country’s balance sheet and its ambitious plans to significantly increase liquefied natural gas production, which will help mitigate the potential effects of the escalating conflict in the Middle East region.
The ongoing conflict between the United States and Israel on the one hand and Iran on the other has caused disruption to shipping movement through the Strait of Hormuz, the vital oil corridor that represents about 20% of global oil and liquefied natural gas supplies.
Fitch assumes that this conflict will not last more than one month, and that the strait will remain closed during this period without causing serious damage to the regional infrastructure of the oil and gas sectors. Based on its baseline scenario, the agency expects the average price of Brent crude to reach about $70 per barrel in 2026.
With the expected increase in liquefied natural gas production, Fitch expects the government’s general budget surplus to rise to 4.1% of GDP in 2027, and to exceed 7% by 2030. With the exception of investment revenues, the budget is expected to return to surplus starting in 2027, with most of the surplus revenues likely to be transferred to the Qatar Investment Authority for use in foreign investments.
The agency expects that Qatar will be able to meet its financing needs for 2026 by relying on a combination of overdrafts from the central bank, borrowing from local and international markets, and withdrawals from the Ministry of Finance’s deposits in the banking sector.
According to Fitch, the impact on LNG exports is likely to increase Qatar’s fiscal deficit in 2026, depending on how long the conflict lasts. However, the country should be able to easily tap debt markets or rely on the sovereign wealth fund, the Qatar Investment Authority, which has accumulated significant assets over decades of investing both domestically and globally.
