Moody’s Investors Service cut its projections for the debt ratings of four Gulf countries including Saudi Arabia, citing concerns over the impact of extended low oil prices on their finances. The ratings agency also downgraded Bahrain’s bond rating to junk status Friday.

Moody’s placed more than 10 oil producing nations on review for a downgrade, including five of the six Gulf Cooperation Council nations — Kuwait, Saudi Arabia, the United Arab Emirates (UAE), Bahrain, and Qatar. The move closely followed another international rating agency, Standard and Poor’s, which has issued a spate of downgrades on the creditworthiness of oil producers in emerging markets in the past few weeks.

Moody’s said it placed Saudi Arabia’s Aa3 rating under review to study if Riyadh’s efforts to reduce dependence on oil revenues and diversify its economy are likely to work. Saudi Arabia’s foreign currency reserves — $650 billion or roughly 95 percent of forecast 2016 gross domestic product — are widely seen in debt markets as being able to cope with low oil prices due to its huge financial reserves and relatively small population.

UAE, Kuwait and Qatar were also placed on review for downgrades. The oil-rich Middle East countries have already taken unprecedented austerity measures, including cutting energy subsidies, as part of efforts to counter the drop in oil revenues.

The ratings agency acknowledged that UAE’s economy was more diversified than others in the region but said that the “structural shock to the oil market” was weakening its credit profile.

Bahrain's rating was lowered one notch to Ba1, considered to be below investment grade and was kept on review for a further downgrade.  

“As oil prices are plunging, revenue of these commodity exporters are greatly impaired, which creates a challenge to their ability to balance the budgets, run the country and control and service the debt,” Wayne Lin, New York-based money manager at QS Investors, told Bloomberg. “This sends a bearish signal to the markets, even though a plunge in oil prices is not news to anyone,” he added.

Apart from the Gulf countries, Moody’s said it would review the credit worthiness of Angola, Gabon, Kazakhstan, Nigeria, Papua New Guinea, Russia, and Trinidad and Tobago. The review would take about two months to complete, the agency said.