Oil has Oman over a barrel
Low oil prices have put Oman’s government under pressure, while regional political turmoil could make life even more uncomfortable. A new economic model is called for, but can the leaders in Muscat find one quickly enough?
Oman is a country that finds itself surrounded by turmoil. To the southwest there is war in Yemen, to the north a fractious Gulf Cooperation Council (GCC) and to the east the question marks that hang over Iran’s relationship with the rest of the world. Domestically, the local economy is also being undermined by low oil prices.
There are opportunities as well as threats, however. The Qatar crisis in particular offers an opportunity for Oman to increase trade with Qatar, which is now forced to bypass its old trading partners in Saudi Arabia and the UAE. The nuclear deal with Iran also opens up the potential for more trade across the Gulf of Oman. In the longer run, once the Yemen conflict ends, there may be opportunities in the reconstruction of that devastated country.
Indeed, there are already indications that links with Qatar are providing a windfall of sorts. Qatar Airways has been increasing services to Omani airports, and at Sohar port – the closest Omani transport hub to the other Gulf countries – plans are afoot to grow.