Oman’s Main Oil Line, carrying crude oil and condensate 1,500km across the country was once described as the ‘economic Nile’ of the sultanate; from its flows, all economic activity feeds. Even sectors not directly linked to the production or sale of oil, like construction or finance, benefit from the steady stream of contracts and business. And for the state, it is by far the main source of income, accounting for 70-80% of revenues.
In times of high oil prices, a strong flow of revenues fills coffers and washes away government reform plans to create new, diversified streams of revenue. When oil prices drop, revenues dry up and the state rushes to enact reforms. This cycle of fiscal abundance and austerity has dictated Oman’s budget for decades with revenues closely tracking oil price movements (see chart 1). (CONTINUED - 776 WORDS)
