Saudi Arabia Seeks $8 Billion Loan Amid War-Driven Economic Pressures

Saudi Arabia is exploring a new $8 billion loan to mitigate the economic impact of the Iran war, which has disrupted trade and oil flows in the region. This reported loan is part of the kingdom's broader borrowing strategy, aimed at financing its budget deficit and refinancing maturing debt.

The 2026 budget projects revenues of SAR1.147 trillion against expenditure of SAR1.313 trillion, leaving a deficit of approximately SAR165 billion, or 3.3% of GDP. Saudi Arabia has already issued a $3.25 billion international Sukuk, which was oversubscribed by five times.

The Iran war has added pressure to the kingdom's finances through defence spending and disruptions to trade and energy. However, Saudi Arabia's strong reserves, continued oil revenues, and access to international capital markets provide significant financial buffers.