countryaah, Oman is located on the Arabian Peninsula, adjacent to the
Gulf of Persia as well as the Red Sea. Oman, like other
countries in the region, has used oil and gas deposits to
develop the country, but - compared to other Gulf states -
has very small reserves. The coast, with strategically
located ports, has traditionally made trade an important
trade route, but has become less important over the years.
Despite oil revenues, Oman is primarily an agricultural
Geographically, Oman is both a coastal state and a desert
country. Although a very small part of the country (0.1 per
cent of the area) is cultivable, agriculture, including
animal husbandry, has traditionally been the dominant
economic sector. On the coast, fishing has been important,
and it is still in smaller coastal communities.
From the late 1970s, Oman has implemented a program for
modernizing society, including a differentiation of
business, including industrialization and privatization.
This has been possible both thanks to the change of head of
state in 1970, when Qaboos bin Said took over as sultan, and
the revenue from oil extraction. These have been used to
develop infrastructure and to invest in other businesses to
create new business avenues. Among other things, the
government has encouraged efforts to control the development
A major concern is providing jobs for Omani citizens;
so-called reorganization. Like other Gulf countries, Oman
has opened to a large number of private sector guest
workers, which the authorities want to replace with Omanans
as far as possible, also as a result of significant
During periods from the mid-1960s, economic growth in
Oman was higher than most other countries. However, Oman
does not belong to the most oil-rich Gulf states, and the
deposits are already largely exploited. This, and lower oil
prices over time, have led to falling export revenues, lower
growth, and higher debt.
Commercial oil was first detected in 1964, and the first
oil export occurred in 1967. Thereafter, the oil sector
dominated the country's economy, and continues to do so.
Revenue from the petroleum sector accounts for about
three-quarters of export revenue, and around two-fifths of
gross domestic product.
In the 2000s, Chinese investors have invested in several
sectors in Oman.
Agriculture and fishing
Oman is not very suitable for farming, but there is a
considerable animal husbandry and extensive fishing. Just
under ten per cent of the working population of the
population is employed in agriculture. Oman is not
self-sufficient in food, and agriculture is dependent on
artificial irrigation. Reducing food imports is a political
priority, also through increased investment in fisheries.
The most important agricultural areas are located in the
Zufarr area in the southwest, and on the al-Batinah plain
along the coast to the north. The main crops consist of
fruits and vegetables, especially melons, citrus fruits and
wheat. Tomatoes, alfalfa, mangoes, melons, cabbage, bananas
and tobacco are also grown. In the oases mainly dates are
grown, and in addition, extensive farming of camels. Oman is
a leading producer of meat in the Arabian Peninsula.
Since the 1980s there has been a gradual expansion of the
fisheries, including with processing for export. Fishing is
mainly conducted as coastal fishing with smaller boats.
Mining and energy
The first oil extraction licenses were granted as early
as 1937, but deposits were first discovered in 1964, at
Fahud, and commercial extraction and export of crude oil
began in 1967. Oman does not have large reserves of crude
oil, and the deposits are scattered in a number of smaller
fields, both onshore and offshore; the main fields are
southwest of Muscat and in Zufar (farthest southwest).
Known crude oil reserves (2017) are estimated at 5.4
billion barrels. The daily production (2017) is around one
million barrels. Oman also has large deposits of natural
gas. These (2017) are estimated at just over 651 billion
cubic meters, a large part of which is expensive to extract.
Liquefied natural gas production started in 2000.
Oil and natural gas exports account for about 70 percent
of Oman's total export revenues. In 2017, oil exports were
around 800,000 barrels per day. There are pipelines from the
production fields to the shipping port of Mina al-Fahal
outside Muscat. In the late 1990s, a pipeline for export of
gas to India, under the Indian Ocean, was investigated, but
the project supported technical difficulties.
Oman has deposits of several minerals, some of which are
mined. Commercial extraction is concentrated to copper,
chromium and limestone. Copper deposits are found mainly in
the Suhar area on the coast of al-Batinah, and copper has
been processed since 1983 at the state-owned Suhar plant. In
the same year, chromium production began, including in Suhar.
Kalstein used in cement production is extracted both north
and south of the country. Occurrences have been found
including asbestos, lead, dolomite, plaster, gold, iron ore,
cobalt, coal, manganese, nickel, silicon, zinc and silver.
Power is primarily produced from own petroleum sources.
Work is underway on the development of large solar power
plants in the south of the country.
Since the mid-1970s, Oman has used export revenues from
the petroleum sector to develop a modern industrial sector.
Foreign interests have also invested in the country. Before
the oil age, the industry was little developed and
traditionally consisted essentially of crafts.
Oman has a significant cement and building industry,
which together with petroleum refining are the most
important industries. The first oil refinery was completed
at Mina al-Fahal in 1982; another is listed by Suhar.
Petrochemical industry has also been established and
aluminum and mineral fertilizers are produced. A number of
desalination plants have been established to remedy the
water situation. Otherwise, household items and food are
Oman's main export products are oil and gas; then metals
and metal products, as well as smaller quantities of
agricultural products, dominated by dates, fish, citrus
fruits and live animals, as well as some textiles. The
country imports a variety of goods, including machinery and
transport equipment, industrial goods and food. The main
trading partners are (2017) China, the United Arab Emirates,
South Korea and Saudi Arabia. Over 43 percent of exports
went to China. About a third of imports came from the United
Arab Emirates; well a quarter from the United States.
Oman's trade with Norway is modest, but imports in 2017
were high, when the country bought Norwegian defense
Transport and Communications
The development of the transport network has largely
taken place since 1970. All major population concentrations
are connected with roads except for some mountain villages.
There are no railways in Oman, but several airports and
strips. International airports can be found at Muscat and
With its strategic location and tradition of shipping and
trade, Oman has focused on port development. The most
important are Port Sultan Qaboos, which includes a container
port, and Mina Raysut; both are near Salalah. Mina al-Fahal
is an important petroleum port. At Matrah there is a deep
water port. Oman has launched a program to modernize the
port infrastructure. It is designed to facilitate the export
of petroleum and industrial products, and to diversify the
economy, including tourism facilitation. Oman also aims to
make better use of its strategic coastal position, and to
establish a hub for international trade. Investments in an
economic free zone in Duqm should contribute to this.
Chinese investors have been involved in the development
of transport in Oman, with plans for development of roads,
water and power grids, as well as in industrial and energy