Energy-rich Qatar facing economic risks, says Moody's
Saudi Arabia in June led a coalition of Middle East countries in severing ties with Qatar, adding a layer of geopolitical risk to the global energy market.
Saudi Arabia is the largest oil producer in the Organization of Petroleum Exporting Countries, Qatar is a leading natural gas supplier and the Persian Gulf is a choke point for the flow of energy supplies from the region.
The countries accused Qatar of supporting terrorist networks and called on the nation to downgrade its relations with the Muslim Brotherhood in Egypt and close its al-Jazeera media outlet, among other things.
The ratings agency said it lowered its outlook on Qatar's banking system from stable to negative because of funding pressures.
Moody's said that simmering disputes in the region could also inhibit external funding and potentially spill over to energy-related revenues.
"Qatari banks' reliance on confidence-sensitive external funding has increased in recent years due to a significant decline in oil-related revenues" Nitish Bhojnagarwala, a vice president at Moody's, said in a statement. "This leaves them vulnerable to shifts in investor sentiment."
Gross domestic product for Qatar should slow from double-digit percent for an eight-year period ending in 2014, when oil prices were above $100 per barrel, to around 2.4 percent in 2017. ■