Saturday 28 / March / 2026
Muscat: S&P Global Ratings affirmed its 'BBB-' long-term and 'A-3' short-term foreign and local currency sovereign credit ratings on Oman with the outlook on the long-term rating is stable.
“The stable outlook is based on the Sultanate of Oman having liquid government assets exceeding 40 percent of GDP, along with total foreign exchange reserves approaching 20 percent of GDP. This enhances Oman’s ability to absorb shocks and maintain stability in public finances and external position.”
“The report also noted that the Sultanate of Oman’s geographical location has enabled it to continue exporting oil and gas without interruption despite the geopolitical tensions in the region,” the report said.
Despite uncertainty around the security situation, S&P says that infrastructure damage at this point in Oman remains relatively limited.
As a result of the Middle East war, S&P expects Oman’s economic activity will temper to 1.4% in 2026, before rebounding to average 2.3% over 2027-2029. Growth will be sustained by higher oil prices and the expectation that Opec+ will support supply expansion.
“Over the past five years, Oman has made progress in addressing significant structural challenges--including high budgetary and external deficits, and subdued economic growth,” S&P said in its report. This includes government efforts to structurally reform public finance and address governance issues, which in part was aided by a supportive oil market. Transparency has also improved with increased data disclosure, including publishing quarterly real GDP data, quarterly fiscal positions, and an annual international investment position, in addition to participating in the IMF Article IV process. Regional instability remains high and could influence policy responses in the medium term.
Oman is the only Gulf state whose hydrocarbon exports do not depend on the Strait of Hormuz, significantly reducing its vulnerability to maritime disruption. Oman exports oil and gas primarily through ports that have direct Arabian Sea access, such as Duqm, Mina al Fahal, and Salalah, which bypass the Strait of Hormuz.
“With ongoing trade route instability and the effective closure of the Strait of Hormuz, Omani crude has been trading at a substantial premium--at about $50 per barrel above Brent--reaching roughly $158 per barrel at end-March.”
“These developments should help keep Oman’s fiscal and external positions in surplus in 2026, given that both rely heavily on hydrocarbons--roughly 60% of merchandise exports and 70% of fiscal revenue,” the New York-based credit agency said.
Non-oil growth is likely to moderate in 2026 due to the evolving geopolitical situation. Heightened regional uncertainty will likely dampen tourism and slow private investment this year, while activity in import-dependent sectors such as manufacturing, construction, and retail is likely to temporarily slow due to ongoing trade route disruptions and higher shipping and insurance costs. Consequently, S&P has lowered the real GDP forecast to 1.4% in 2026, compared to 2.2% in the previous review. As with the rest of the Gulf region, Oman’s population growth dynamics remain sensitive to economic and geopolitical conditions (just under 70% of the workforce is dependent on expat labour), with potential permanent outflows weighing on medium-term consumption and investment.
S&P further expect hydrocarbons to represent about 30%-35% of GDP, reflecting Oman’s geographic position. While the country has been working to boost non-oil sectors given recent oil market developments, activity within the sector will support oil growth of about 3.5% per year in line with our expected increase in production. “We maintain that oil production will progressively increase toward 1.2 million barrels per day (bpd) over 2027-2029, ahead of schedule and up from 1.03 million bpd produced in 2025,” the rating agency said.
S&P anticipates condensate and gas production to increase in the medium term, as the government remains committed to increasing green hydrogen production to one million tonnes by 2030. Formally established over 2019-2020, Energy Development Oman (EDO) and OQ (a merger between Oman Oil Co. and Oman Oil Refineries and Petroleum Industries Co.) are the two national energy companies charged with managing Oman's energy sector developments. Both companies have worked to realise efficiencies and pursue growth opportunities in Oman's energy sector and are likely to continue to ensure the country remain steadfast in its commitment to deliver exports.
The report further elaborated that in 2025, growth was supported by strong activity in the construction, manufacturing, and financial services sectors. Combined with robust performance in the oil sector, this resulted in a preliminary real GDP growth estimate of 2.4%, above our earlier forecast of 2.0%. A stronger non-oil sector partly reflects the relaunch of the country’s golden visa programme in 2025, which lowered the investment threshold to OMR200,000 (approximately $520,000) and broadened the scope for investment, as well as covering family members. This has supported investment in property and listed shares, and we expect this will continue over the medium term.
