Oman is looking to Swiss-headquartered trading firm Gunvor for an ‘up to’ $3bn loan linked to oil, Reuters reported this week. The sultanate is no stranger to the spot market, but this is the first time Muscat has sought to arrange a loan-for-oil agreement – a telltale (and risky) sign that a government is cash-strapped and looking to cash in on its oil output. The Kurdistan Regional Government (KRG) has sought a similar approach in the past (MEES, 8 April 2016), as has Venezuela. Repaid in the form of future deliveries, the deal can turn sour when oil prices drop and the country is stuck overpaying.

Whilst not exactly a beacon of economic health (MEES, 4 January), and having its credit rating downgraded several times in recent years (MEES, 8 March), Oman could nonetheless raise such funds on the debt market as it has routinely in the past. (CONTINUED - 143 WORDS)