Oil hopes could distract Bahrain from urgent reforms

Subject Hydrocarbons in Bahrain’s economy. Significance A potentially game-changing offshore oil and gas discovery could offer fresh hope for Bahrain’s weak public finances and broader economic woes. The find, announced in April, comes at a time when -- although its recent economic performance has been stronger than anticipated -- there has been medium-term stagnation in some of the sectors at the heart of Manama’s diversification efforts. Impacts Renewed gas production could render obsolete the liquefied natural gas import terminal due for completion in 2019. The hope of new oil wealth could support an upgrade in Bahrain’s credit rating and lower borrowing costs. Neighbouring Gulf states may be increasingly less inclined to make valuable grants, after reports of newfound oil wealth.