S&P Global Ratings has placed United Energy Group's (HKG:0467) B+ long-term issuer credit rating on CreditWatch with negative implications, according to a recent release.

The placement stems from the likelihood of a downgrade over the next 90 days, given a downgrade on Iran or continued conflict in the Middle East that adversely impacts the company's operations or liquidity for a longer period, S&P said.

The move follows a similar action on Iraq, where a drop in oil production of more than 70% has left the company's primary assets vulnerable to prolonged shutdowns.

The company's ability to export oil and collect cash has been eroded due to the closure of the Strait of Hormuz, the rating agency said.

The company maintains a $400 million cash buffer to service its 2026 debt, with room to lessen capital expenditure and dividends in a stress scenario, S&P said.

The company is also leaning on its Pakistan and Egypt operations, which remain insulated from the strait's closure.