US ratings agency Moody’s Investors Service (Moody’s) has cut its outlook for the debt ratings of Saudi Arabia and three other GCC states.

The agency also lowered Bahrain’s rating to below investment grade, citing concern over the impact of weak oil prices on the country’s finances.

Moody’s says it had recently cut its forecasts for Brent crude prices, a benchmark for more than half of the world’s oil, to $33 a barrel in 2016 and $38 in 2017, rising slowly to $48 by 2019. In December 2015, it had predicted Brent crude at $43 a barrel in 2016.

Moody’s rating actions come just weeks after fellow ratings agency Standard & Poor’s (S&P) cut its rating on Saudi Arabia, Oman and Bahrain, attributing the downgrades to the increased vulnerability of these states to a prolonged period of low oil prices.

Late in February, Moody’s cut its rating of Oman.

The agency has placed Saudi Arabia’s Aa3 rating on review for a possible downgrade. It will study whether the kingdom’s efforts to expand its non-oil revenues and diversify its economy will work.

Saudi Arabia’s foreign reserves, at about $650bn at the end of September 2015 – roughly 95 per cent of forecast 2016 GDP – are large. “But potential calls on these funds are growing, emanating from the need to finance future current account and budget deficits, and from use in small-scale currency interventions to defend the currency peg amid rising speculation,” according to a press statement from Moody’s cited by news agency Reuters.

The ratings agency has also put the UAE, Kuwait and Qatar on review for downgrades.

Moody’s has acknowledged that the UAE has planned tax reforms and that its economy is more diversified than most in the region. However, “the structural shock’’ to the oil market is weakening the government’s balance sheet and its economy, and therefore its credit profile, according to the agency.

Moody’s has lowered its rating for Bahrain, the Gulf state with much smaller foreign reserves, by one notch to Ba1, below investment grade. It has kept the rating on review for a further downgrade.