Tuesday 12 April 2016 1:24 pm

Fitch has downgraded Saudi Arabia’s credit rating due to expectations the oil price will stay low

Saudi Arabia’s credit rating has been lowed be ratings agency Fitch due to the slump in the oil price expected to go on for longer than was previously thought.

The kingdom’s rating was knocked down a notch to AA-, from AA previously.

In a note Fitch warned that the low price of oil, expected by the agency to continue for some time, will have "major negative implications for Saudi Arabia's fiscal and external balances."

The oil price has dived from $114 a barrel in June 2014 to trade around $43 a barrel for benchmark Brent crude today, though has staged something of a recovery in recent months, adding over 50 per cent in value from lows of $27 per barrel in January.

Saudi Arabia is one of the world's largest oil exporters and the de facto leader of the Opec oil cartel.

The slump in the oil price was triggered by the kingdom's refusal to cut production to artificially prop up the price, a major change of strategy from recent years.

Saudi Arabia has said Opec's decreased market share due to the rise of shale oil production means it is now unable to control the oil price with its production alone and has been working on a deal with Russia to cap output.

The rating cut comes ahead of a meeting of the 13 members of the oil exporting cartel with non-Opec Russia and potentially other non-Opec members in Doha on 17 April to try and agree to freeze oil production at January levels.

AA- is the fourth-highest investment grade, though the negative outlook its given the kingdom means that more downgrades could be on their way.

The cut brings Fitch into line with Moody's rating for the country, though Standard and Poor's gives Saudi Arabia an A-, three steps lower.

It's the first time since 2004 that Fitch has downgraded the de facto Opec leader and puts it in the same camp as South Korea and Macau.