[Salon] Oman makes economic gains - ArabDigest.org Guest post

Oman makes economic gains Summary: Oman found itself the target of Donald Trump’s threats but the Gulf state which worked hard to prevent the war is, unlike its GCC neighbours, seeing economic benefits. Oman made the news yesterday though not in a way that could cause anything but deep offence to the Omanis and their prime minister Sultan Haitham bin Tariq. Donald Trump at a cabinet meeting and in response to a journalist’s question about whether he would accept a short-term deal that would see Oman and Iran jointly manage the Strait of Hormuz replied: "No, the Strait is going to be open to everybody …It’s international waters, and Oman will behave just like everybody else, or we'll have to blow them up. They understand that, they'll be fine.” On CNN the neoconservative critic Robert Kagan, admittedly no fan of Donald Trump, was blunt when asked what he thought. “Shocking” was how he put it while making the point that this and recent US ‘defensive’ strikes were “an effort to disguise the fact that we have basically lost this war…the Iranians are not afraid of the war starting up again.” Kagan went on to say that just as Trump was shedding America’s traditional allies at speed Israel too was showing “reckless disregard for its Gulf allies.” Like other Trump pronunciamentos though it has real world consequences the statement itself has no grounding in the real world. America is not going to blow up Oman and Sultan Haitham and his government will continue to pragmatically pursue what is in Oman’s best interests. That includes conversations with Tehran about how best to resolve the Strait of Hormuz blockade. Despite the US-Israeli war disrupting a near-final peace deal brokered by Muscat, Oman’s strategic geography and neutrality have successfully shielded it from regional strikes, turning a projected budget deficit into a healthy surplus. What America and Israel did blow out of the water was the peace deal that the Omanis were close to delivering when the 28 February war was launched. Oman’s foreign minister Badr Albusaidi said in late March that the US and Iran were “on the verge of a real deal.” Albusaidi writing in The Economist added that “the US had lost control of its foreign policy” and had been lured into the war by Israel: The American administration’s greatest miscalculation, of course, was allowing itself to be drawn into this war in the first place….This is not America’s war, and there is no likely scenario in which both Israel and America will get what they want from it. Oman, of all the Gulf states, worked most prodigiously and publicly to stop the conflict from happening. In one of those curious anomalies of war it has experienced an economic boost. In part that is down to geography. Though not a big global energy supplier it doesn’t need the Strait of Hormuz to get its oil to world markets. It has helped too that thanks to long established economic, military and diplomatic ties with Iran Oman was the Gulf state least targeted while its neighbours the UAE, Saudi Arabia, Kuwait, Qatar and Bahrain were hit and some heavily by drone and missile strikes, particularly the UAE which sustained more attacks than even Israel. Iran by striking back when hit by the US (as recently as yesterday targeting Kuwait) has deeply damaged the GCC’s hitherto seemingly unassailable security and stability nexus. But here too Oman has benefitted as the one GCC state least likely to be under threat should the war kick off again. That’s being taken on board by foreign investors in the energy sector. Seizing the moment, in April the Ministry of Energy and Minerals put five new oil and gas concessions up for bids. Where Oman has seen the biggest win is in the price of oil which has gone from US$70 a barrel to over US$100. Though delayed somewhat by monthly futures contracts the additional revenue is now flowing into Oman’s coffers. As Sabah Naoush notes in an excellent analysis piece for Gulf House: In May Omani crude prices surged to $124.4 per barrel, exceeding average Brent prices. Under the same formula, May revenues reached approximately $3.301 billion, representing an increase of 89 percent compared with April. In June 2026, Omani crude prices are expected to average $104.7 per barrel, generating revenues of approximately $2.688 billion. In July 2026, prices are projected to reach $106 per barrel, producing revenues estimated at $2.812 billion. What that means is that a projected deficit has now flipped into a healthy surplus: “from a deficit of 530 million rials to a surplus of approximately 936 million rials.” Naoush cautions that the war has occasioned heavier than anticipated expenditure on Oman’s military. Still surplus in hand Oman can now pursue its goals of increased FDI and further development of its energy infrastructure. Given its geography - and once the war has ended - the opportunities for Oman to become an energy hub and to deliver the ultimate goal of a diversified economy are now more achievable than they were when Trump and Netanyahu launched their war. As with other of America’s once friends and allies Trump’s bullying and insults have served to spur Oman on in the drive to ignite the latent strength of middle powers that Canadian Prime Minister Mark Carney referenced in his Davos speech. It is an appropriate response to what Robert Kagan calls the behaviour of “an aggressive, imperialist rogue superpower …grabbing land, grabbing oil, grabbing money.”