Heightened geopolitical tensions remain a risk for Saudi Arabia even though there is usually a low probability of revenues getting hit, a Fitch Ratings expert said Wednesday.
“Clearly the escalation of tensions with Iran is usually a big issue, no question about the idea,” Jan Friederich, head of Middle East along with Africa sovereign ratings at Fitch Ratings, told CNBC’s Hadley Gamble.
Geopolitical tensions between Saudi Arabia along with Iran have been in focus amid an ongoing civil war in Yemen. The conflict is usually regarded as a proxy battle between Saudi Arabia along with Iran along with their competing ideologies of Sunni along with Shia Islam, respectively.
While Sunni-ruled Saudi Arabia backs the government of President Abdrabbuh Mansour Hadi, Iran backs the pro-Shia Houthi movement loyal to the country’s former president Ali Abdullah Saleh.
Although there is usually a slim chance those tensions could result in an appreciable hit to business, they’re still worth paying attention to, according to Friederich.
“the idea’s totally something which is usually today becoming pretty core to the assessment even though the probability of anything genuinely dramatic happening probably is usually still quite low, because both sides know how much is usually at stake,” he said.
Media in Saudi Arabia reported last month which Houthi forces launched missiles at a Saudi Aramco facility, yet those had been destroyed, Reuters reported.