Omani crude prices have averaged $66.44/B for the year to date, up $15.45/B (30%) year-on-year. Government revenues are thus set for a substantial boost this year, whatever happens in the non-oil economy, and over the half of 2018 Oman’s year-on-year deficit halved (MEES, 27 July). MEES estimates a $4.38bn (1.69bn Omani Rials at the fixed exchange rate of OR1=$2.6) boost to hydrocarbon revenues this year (see table), and monthly data is already corroborating this trend: oil and gas revenues in the first half of 2018 jumped to $9.84bn from $7.42bn a year earlier.

In many respects, the return of $70/B crude prices is a boon for the sultanate. The country went from a nearly balanced budget in 2013 to consecutive deficits of $12.03bn, $13.76bn, and $9.76bn from 2015 to 2017. This saw Oman’s public debt balloon from $3.96bn at end-2014 to $28.96bn at end-2017. And while this equates to only about 40% of GDP (the equivalent of, say, Sweden or Australia), international observers are nonetheless troubled by the underlying economics—a fact reflected in rating agencies’ decision to downgrade Oman’s economic outlook several times following the 2014 oil price crash (MEES, 24 November 2017). S&P rates Oman as ‘junk’ status. (CONTINUED - 1161 WORDS)