Fitch Affirms Saudi Aramco at ‘A+’ with Stable Outlook
Fitch Ratings has affirmed Saudi Arabian Oil Company’s (Saudi Aramco) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at ‘A+’, with stable outlooks.
Saudi Aramco’s Long-Term IDRs are constrained by those of Saudi Arabia (A+/Stable), its majority shareholder, given their close links.
Ratings analysts said they assess Saudi Aramco’s Standalone Credit Profile (SCP) at ‘aa+’. The Short-Term IDR of ‘F1+’ is equalised with that of the sovereign, according to the rating note.
Based on its profile, Saudi Aramco is one of the largest global integrated oil producers and Saudi Arabia’s national oil company.
Its financial profile benefits from strong pre-dividend free cash flow (FCF) generation and conservative financial policies.
Fitch said its business profile is characterised by an exceptional scale of production, vast reserves, low production costs and downstream expansion.
Aramco upstream operations focus on a single country and compared with oil and gas majors, its operations have a strong emphasis on crude oil production with rising natural gas output.
Saudi Aramco’s proved reserves were 250 billion barrels of oil equivalent (boe) at end-2024, which provides ample capacity to sustain government-directed production levels until the expiry of its concession in 2057 (and beyond upon renewal of the concession), by developing the most economically attractive areas.
Fitch noted that its hydrocarbon production has one of the world’s lowest costs due to the geology in Saudi Arabia, favourable onshore and shallow water offshore environments in which the reservoirs are located and big economies of scale relevant to the use of infrastructure and the application of technology.
The company produced 12.4mmboe/d of total hydrocarbons in 2024, including 10.3mmbbl/d of liquids, with 53% of crude oil used by Saudi Aramco’s downstream operations, including refining and petrochemical complexes.
Saudi Aramco operates the master gas system in Saudi Arabia, owns terminals and distribution hubs, retail fuel networks as well as shipping capacity with a global footprint. The company has set a target for 70% of procurement to be sourced locally and pursues a range of low-carbon initiatives. This reflects the ambition to maximise value from the hydrocarbon resources for the benefit of Saudi Arabia.
Aramco’s financial profile is very conservative, according to Fitch and rating analysts expect it will remain less leveraged than oil and gas majors Shell plc and BP plc.
“We forecast Fitch-defined earnings before interest tax depreciation and amortisation (EBITDA) net leverage will remain in a range of 0.1x-0.4x between 2025 and 2028”.
In 2025, the company paid progressive base dividends of USD84.6 billion plus USD0.9 billion performance-linked dividends.
“Under our oil price assumptions, we expect Saudi Aramco to incur some negative FCF after capex and sustainable and progressive base dividends, with EBITDA net leverage rising from an estimated 0.1x at end-2025 to around 0.4x at end-2028.
“Our forecast therefore does not include performance-linked dividends for 2026-2028. We assume Saudi Aramco is able to reconsider its capex profile or dividend policy, if oil prices fall below our midcycle price of USD60 per barrel for an extended period”, Fitch said.
Meanwhile, Fitch said it has lowered its 2025-2027 oil price assumptions, reflecting moderating market fundamentals driven by significant oversupply.
Production growth is expected to substantially exceed demand increases, with global supply expanding by 3.1 mmbpd in 2025 and 2.5 mmbpd in 2026 (based on International Energy Agency forecasts), led by non-OPEC+ producers and OPEC+.
“We forecast demand growth at only 0.8 mmbpd in 2025 and 2026, constrained by slower economic growth, petrochemicals downturn and energy transition. EV adoption displaced 1.3 mmbpd in 2024, the pace of which may slow, but the trend will continue”, Fitch said.
Saudi Aramco’s rating is constrained by that of Saudi Arabia, in accordance with Fitch’s Government-Related Entities (GRE) Rating Criteria and Parent and Subsidiary Linkage Rating Criteria.
Ratings analysts said this reflects the influence the state has over the company, for example, through regulating the level of production in line with OPEC+ guidance.
“We assess decision making and oversight as ‘Very Strong’, due to the government’s influence on the strategic direction of the business, including the ability to determine Saudi Aramco’s maximum sustainable oil capacity”.
Saudi Aramco is 81.48% owned directly by the government of Saudi Arabia and 16% by the Public Investment Fund and its wholly owned subsidiaries.
Fitch analysts expect state support to be forthcoming, although historically the company’s robust financial position has not necessitated government support. Saudi Arabia has provided support to other GREs in the past.
Rating analysts assess the preservation of the government policy role factor as ‘Very Strong’ due to Saudi Aramco’s vital role in the Saudi Arabian economy as a main provider of feedstock to the country’s power generation fleet and other key end-markets.
Fitch expects oil revenues to account for 54% of the government’s budget revenue in 2025. The ‘Very Strong’ contagion risk is due to the company’s status as a prominent issuer in international capital markets, serving as a proxy for the sovereign. VFD Closes Strong as Investors Confidence Surges, Defies Rights Issue Pressure
