The credit rating agency said the upgrade in outlook is linked to the strength of Saudi Arabia’s economy, which was also changed to positive from stable earlier this month.

Saudi Basic Industries Corporation, also known as SABIC, Saudi Telecom Co., known as stc, and the Saudi Power Procurement Co. were among the other companies to see their grading increase.

The Saudi Electricity Co. also received a boost.

In a report explaining its rationale for the shift, the ratings agency said: “(These) rating actions are a direct consequence of the sovereign rating action and reflect the credit linkages between the Government of Saudi Arabia and each of the six entities.

“While these corporates benefit to varying degrees from international assets and cash flows, they all have significant credit linkages to the Saudi Arabia sovereign and are exposed to the domestic environment including political, economic, regulatory and social factors.”

Reflecting on Aramco, the report said the company’s A1 rating “reflects its very large operational scale, significant downstream integration and strong financial flexibility given its low cost structure and low leverage relative to cash flows.”

It added: “These characteristics provide resilience through oil price cycles and also help mitigate carbon transition risk, which is a material credit consideration for oil and gas companies.”

Moody’s said that SABIC had been able to maintain its strong global position in the petrochemical and fertilizer market thanks to “competitively priced domestic feedstock under long-term contracts with Saudi Aramco.”

The report added: “These advantages help mitigate to an extent the volatility of its predominantly commodity-based petrochemical, fertilizer and steel activities and SABIC's asset concentration in Saudi Arabia.”

In a section on the PIF, Moody’s said the organization had a “high-quality investment portfolio”, a “very strong financial profile with very low leverage and very high interest coverage”, and an “excellent liquidity profile”.