Credit ratings agency Moody's changed Bahrain's outlook to "negative" from "stable" on ​Friday, citing the ⁠impact of Middle East conflict ‌on the Gulf state's already weak fiscal and debt metrics.

The ​negative outlook reflects risks from disruption to shipping through ​the Strait ​of Hormuz and air travel around the Gulf, which is weighing on Bahrain's ⁠oil and aluminium exports and tourism sector, Moody's said, adding that these pressures would further erode government finances and strain the country's thin foreign-exchange ​buffers.

The ‌war has ⁠disrupted energy ⁠supplies and triggered a global economic crisis. Hydrocarbon revenues account ​for about half of government ‌revenue, while nearly all ⁠crude exports pass through the Strait of Hormuz, leaving the small oil-producing Gulf state's economy highly exposed to any prolonged disruption to shipping and trade routes.

The credit agency, however, affirmed its long-term local and foreign currency issuer ratings and foreign currency senior unsecured debt ‌rating at "B2", noting that the country was already ⁠grappling with a heavy debt ​burden before the conflict erupted, with government debt estimated at 147% of GDP at ​the end of ‌2025, among the highest globally. (Reporting ⁠by Ankita Bora ​in Bengaluru; Editing by Maju Samuel)