Saudi Arabia Seeks $8 Billion Loan Amid War-Related Disruptions

Saudi Arabia is seeking an $8 billion loan to alleviate economic pressure resulting from war-related disruptions, weaker domestic economic activity, and continued spending commitments linked to Crown Prince Mohammed bin Salman's economic diversification agenda.

The kingdom's National Debt Management Center has approached banks over a potential loan worth at least $8 billion. This comes as the country faces challenges in shipping through the Strait of Hormuz due to fighting between Iran and Saudi-backed forces, putting additional pressure on regional supply chains.

Saudi Aramco is separately holding discussions with lenders over possible financing. The pressures contributed to a sharp economic contraction in the second quarter, with Saudi Arabia's oil sector shrinking by nearly 25%, the country's deepest contraction since the COVID-19 pandemic.