Moody’s assesses Saudi Arabia's (A1 positive) credit quality as being supported by its large economy, increasing institutional and policy effectiveness, and the government's robust balance sheet. However, the sovereign is exposed to cyclical declines in oil demand and prices, and to longer-term risks stemming from global carbon transition given its heavy, but gradually declining, economic and fiscal reliance on hydrocarbons. Saudi Arabia is also exposed to geopolitical risks, rooted in tensions with Iran.