Fitch directly linked the negative review to escalating security risks in the Gulf, arguing that the geopolitical environment could deteriorate further even with the war expected to end within weeks.
Possibility of reduction
This is the first official sovereign action announced by one of the three major rating agencies towards Qatar since the outbreak of the war, as Standard & Poor's had affirmed the country's rating at AA/A-1+ with a stable outlook on March 13.
Although the decision does not mean an immediate downgrade, it opens the door to a possible downgrade if security risks persist, energy infrastructure suffers further damage, or if production and transportation disruptions lead to a tangible deterioration in public finances and the external balance.
$20 billion in losses
The gas sector stands out at the heart of these risks, following the attack on the Ras Laffan complex, which initial estimates by Qatar Energy indicate disrupted about 17% of Qatar’s gas liquefaction capacity for several years, with potential losses of up to $20 billion annually.
These blows prompted Qatar Energy to declare force majeure on some of its liquefied natural gas contracts, an indication that the disruption was no longer limited to operations, but had extended to contractual obligations and global supplies.
The strike on Ras Laffan comes as part of a broader pattern of Iranian targeting of energy infrastructure in the Gulf since the outbreak of the war, including drone and missile attacks on oil facilities and logistics facilities in more than one country, including attempts to target facilities in eastern Saudi Arabia, as well as incidents affecting ports and shipping services in the UAE, in addition to repeated threats to navigation in the Strait of Hormuz.
