S&P reaffirms Abu Dhabi credit rating, sees crude output at 3.1m bpd in 2024

London, (Quantum Commodity Intelligence) – Credit rating agency S&P Global Ratings reaffirmed the investment grade rating of Abu Dhabi, citing the strength and resilience of its economic fundamentals and the emirate's large fiscal buffers that are supported by revenue from the hydrocarbon sector.

The AA/Stable/A-1+ rating and stable outlook of the emirate reflects the rating agency's expectation that despite oil price fluctuations, Abu Dhabi's fiscal position will remain robust over the next two years and the emirate has a very strong capacity to meet financial commitments, S&P said in a statement on Tuesday.

"The exceptional strength of the government's balance sheet provides a buffer to counteract the effect of oil price swings and the effect of Covid-19 on economic growth, government revenue, and the external accounts, as well as the effect of high geopolitical uncertainty in the Gulf region," the ratings agency said.

S&P expects Abu Dhabi's oil production – which it estimates declined to an average of 2.8 million barrels per day in 2020 from 3.1 million bpd a year earlier – will return to the 2019 level by 2024.

Quantum assessed Middle East benchmark Dubai crude for August delivery at $69.05/b on June, the highest Dubai price since January 2020.

Murban crude futures trading on Abu Dhabi's IFAD exchange Tuesday was at $69.85/b, up 2.54 % on the day.

Since the contract was launched at the start of April, ADNOC has used Murban as the underlying benchmark for all exports.

Murban is ADNOC's flagship grade and one of the largest crude streams in the world with a production capacity currently around 1.7 million bpd, but this could grow to as much as 2.5 mil bpd by the end of the decade.