Oman: Reform, Security, and U.S. Policy
Kenneth Katzman
Specialist in Middle Eastern Affairs
January 20, 2010
Congressional Research Service
7-5700
www.crs.gov
RS21534
CRS Report for Congress
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repared for Members and Committees of Congress
Oman: Reform, Security, and U.S. Policy
Summary
The Sultanate of Oman is a long-time U.S. ally in the Persian Gulf; it has allowed U.S. access to
its military facilities for virtually every U.S. military operation in and around the Gulf since 1980,
despite the sensitivities in Oman and throughout the Middle East about a U.S. military presence
there. Oman also has fully and consistently supported U.S. efforts to achieve a Middle East peace
by publicly endorsing the peace treaties that have been achieved between Israel and some of its
Arab neighbors and by occasionally hosting Israeli political leaders or meeting with them outside
Oman.
Partly in appreciation for this alliance, the United States has forged a free trade agreement (FTA)
with Oman. Oman is attempting to diversify its economy, in part because it has relatively small
oil reserves. In addition, the United States has praised Sultan Qaboos for opening up the political
process, even though that process has been controlled by Oman’s leadership and has unfolded too
slowly for some Omanis. The political liberalization that has occurred since the 1980s has given
citizens the opportunity to express their views on issues but has not significantly limited Qaboos’
role as major decision maker.
Nor have successive U.S. Administrations criticized Oman’s relatively close relations with Iran.
Oman has always been less alarmed by the perceived threat from Iran than have the other Gulf
states, and it views possible U.S. military action against Iran’s nuclear facilities as potentially
more destabilizing to the region than is Iran’s nuclear program or Iran’s foreign policy. Still, this
relationship has not affected close U.S.-Omani relations.
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Contents
Introduction ................................................................................................................................ 1
Defense and Security Ties ........................................................................................................... 2
Oman’s Capabilities and U.S. Security Assistance ................................................................. 3
Cooperation Against Islamic Militancy.................................................................................. 5
Democratization and Human Rights ............................................................................................ 5
Election History .................................................................................................................... 6
Broader Human Rights Issues ............................................................................................... 7
Religious Freedom .......................................................................................................... 7
Advancement of Women ................................................................................................. 7
Trafficking in Persons ..................................................................................................... 7
Regional Relations ...................................................................................................................... 8
Iran....................................................................................................................................... 8
Iraq....................................................................................................................................... 9
Arab-Israeli Issues ................................................................................................................ 9
Yemen ................................................................................................................................ 10
Economic and Trade Issues ....................................................................................................... 10
Figures
Figure 1. Map of Oman ............................................................................................................... 2
Tables
Table 1. Recent U.S. Aid to Oman............................................................................................... 5
Contacts
Author Contact Information ...................................................................................................... 11
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Oman: Reform, Security, and U.S. Policy
Introduction
Oman is located along the Arabian Sea, on the southern approaches to the Strait of Hormuz,
across from Iran. Except for a brief period of Persian rule, Omanis have remained independent
since expelling the Portuguese in 1650. The Al Said monarchy began in 1744, extending Omani
influence into Zanzibar and other parts of east Africa until 1861. A long-term rebellion led by the
Imam of Oman, leader of the Ibadhi sect (neither Sunni or Shiite and widely considered
“moderate conservative”) ended in 1959; Oman’s population is 75% Ibadhi. Sultan Qaboos bin
Sa’id Al Said, born in November 1940, is the eighth in the line of the monarchy; he became
Sultan in July 1970 when, with British support, he forced his father to abdicate.
He is considered popular, but his brief marriage in the 1970s produced no children and therefore
no clear successor. Succession would be decided by a “Ruling Family Council” of his relatively
small Al Said family (about 50 male members) or, if they fail to reach an agreement, by a
succession letter written by Qaboos prior to his death. The United States signed a treaty of
friendship with Oman in 1833, one of the first of its kind with an Arab state. (This treaty was
replaced by the Treaty of Amity, Economic Relations, and Consular Rights signed at Salalah on
December 20, 1958.) Oman sent an official envoy to the United States in 1840. A U.S. consulate
was maintained in Muscat during 1880-1915, a U.S. embassy was opened in 1972, and the first
resident U.S. Ambassador arrived in July 1974. Oman opened its embassy in Washington in 1973.
Some Key Facts on Oman
Population
3.4 million, which includes 577,000 expatriates
Religions
Ibadhi Muslim, 75%; other 25% (Sunni Muslim, Shi te Muslim, Hindu
GDP (purchasing power
$67 billion (2008)
parity, PPP)
GDP per capita (PPP) $20,200 (2008)
GDP Growth Rate
3.7% (2009)
Unemployment Rate
15%
Inflation Rate
3.6% (2009), down from 12.4% in 2008
Exports $33.9
billion. Main export markets: China, South Korea, Japan, Thailand, UAE,
United States, Iran
Imports
$13.3 billion. Main import sources: UAE, Japan, United States, Germany, India
Oil Production
810,000 barrels per day (2009)
Foreign Exchange and
$11.11 billion
Gold Reserves
Sources: CIA World Factbook, December 3, 2009; Oman National budget press statement provided by Embassy
of Oman in Washington, D.C. , January 2010.
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Figure 1. Map of Oman
Source: CRS
Defense and Security Ties
Sultan Qaboos, who is Sandhurst-educated and is respected by his fellow Gulf rulers as a defense
strategist, has long seen the United States as the key security guarantor of the region. He also has
consistently advocated expanded defense cooperation among the Gulf states. Oman was the first
Gulf state to formalize defense relations with the United States after the Persian Gulf region was
shaken by Iran’s 1979 Islamic revolution, which was at first feared would spread throughout the
Middle East and lead to the downfall of monarchy states there. Oman signed an agreement to
allow U.S. forces access to Omani military facilities on April 21, 1980. Three days later, the
United States used Oman’s Masirah Island air base to launch the failed attempt to rescue the U.S.
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embassy hostages in Iran. Partly because of the close defense relations, Qaboos was accorded a
formal state visit in April 1983 by President Reagan. He had previously had a U.S. state visit in
1974. President Clinton visited briefly in March 2000.
Oman subsequently played the role of quiet intermediary between the United States and Iran for
the return of Iranians captured in clashes with U.S. naval forces in the Gulf during the 1980-1988
Iran-Iraq war. Under the access agreement, which was renewed in 1985, 1990, and 2000 (for ten
years), the United States reportedly can use—with advance notice and for specified purposes—
Oman’s military airfields in Muscat (the capital), Thumrait, and Masirah Island, and some U.S.
Air Force equipment, including lethal munitions, are stored at these bases.1 During the renewal
negotiations in 2000, the United States acceded to Oman’s request that the United States fund a
$120 million upgrade of a fourth air base (Khasab) at Musnanah (50 miles from Muscat).2 The
U.S. military has sought to respond to an Omani request to move some U.S. equipment to
expanded facilities at Musnanah, from the international airport at Seeb, to accommodate
commercial development at Seeb. However, conferees on the National Defense Authorization Act
for FY2010 (P.L. 111-84) did not incorporate into that law a DoD request for $116 million to
carry out that move, on the grounds that U.S. Central Command has not formulated a master
plan—or obtained an Omani contribution—for the needed further construction at Musnanah.
However, the congressional refusal to authorize the funds does not appear to have thus far
jeopardized renewal of the access agreements later in 2010. At the negotiations, Oman might
again request additional U.S. assistance to upgrade Omani facilities or try to place some new
limitations on U.S. use of the facilities.
Oman’s facilities contributed to U.S. major combat operations in Afghanistan (Operation
Enduring Freedom, OEF) and, to a lesser extent, Iraq (Operation Iraqi Freedom, OIF), even
though Omani leaders said that invading Iraq could “incite revenge” against the United States in
the Arab world. According to the Defense Department, during OEF there were about 4,300 U.S.
personnel in Oman, mostly Air Force, and U.S. B-1 bombers, indicating that the Omani facilities
were used extensively for strikes during OEF. The U.S. presence fell slightly to 3,750 during OIF;
other facilities closer to Iraq, such as in Kuwait, were more extensively for OIF. There are now
approximately 35 U.S. military personnel in Oman, well below the pre-September 11, 2001,
figure of 200 U.S. personnel. Since 2004, Omani facilities reportedly have not been used for air
support operations in either Afghanistan or Iraq.
Oman’s Capabilities and U.S. Security Assistance3
Oman’s 43,000 person armed force is the third largest of the Gulf Cooperation Council states
(GCC, including Saudi Arabia, Kuwait, UAE, Oman, Bahrain, and Qatar). Its force is widely
considered one of the best trained but not the best equipped. However, Oman is trying to expand
and modernize its arsenal with purchases from the United States. Because of his historic ties to
1 Hajjar, Sami. U.S. Military Presence in the Gulf: Challenges and Prospects. U.S. Army War College, Strategic
Studies Institute. P. 27.
2 Finnegan, Philip. “Oman Seeks U.S. Base Upgrades.” Defense News, April 12, 1999.
3 Section 564 of Title V, Part C of the Foreign Relations Authorization Act for FY1994 and FY1995 (P.L. 103-236)
banned U.S. arms transfers to countries that maintain the Arab boycott of Israel during those fiscal years. As applied to
the GCC states, this provision was waived on the grounds that doing so was in the national interest.
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the British military (Sandhurst education), Qaboos early on relied on seconded British officers to
command Omani military services, and much of its arsenal still is British-made. British officers
are now mostly advisory.
In an effort to modernize its Air Force, in October 2001, after years of consideration, Oman
purchased (with its own funds) 12 U.S.-made F-16 C/D aircraft from new production. Along with
associated weapons (Harpoon and AIM missiles), a podded reconnaissance system, and training,
the sale was valued at about $825 million; deliveries were completed in 2006. Oman made the
purchase in part to keep pace with its Gulf neighbors, including UAE and Bahrain, that had
bought F-16s. In July 2006, according to the Defense Security Cooperation Agency (DSCA),
Oman bought the JAVELIN anti-tank system, at a cost of about $48 million. Some major U.S.
sales to Oman are expected as part of an estimated $20 billion sales package to the Gulf states
under the U.S. “Gulf Security Dialogue” intended to contain Iran, although most of the sales
notified thus far are to the much wealthier Saudi Arabia and UAE. In June 2009, Lockheed
Martin said it had received a contract from Oman to buy the C-130J “Super Hercules” military
transport aircraft. The terms were not disclosed. In the past two years, Oman has continued to buy
some British equipment, including Typhoon fighter aircraft and patrol boats, and it has also
bought some Chinese-made armored personnel carriers and other gear.
U.S. Foreign Military Financing (FMF)—recent amounts of which are shown below— has been
used to help Oman buy U.S.-made coastal patrol boats for anti-narcotics and anti-smuggling
missions, as well as aircraft munitions, night-vision goggles, upgrades to coastal surveillance
systems, communications equipment, and de-mining equipment. The proposed increase in FMF
for Oman for FY2010 (although still at low levels compared to many other recipients of U.S.
security aid) reflects additional planned sales to Oman of such gear. The International Military
Education and Training program (IMET) program is used to promote U.S. standards of human
rights and civilian control of military and security forces, as well as to fund English language
instruction, and promote inter-operability with U.S. forces. (The United States phased out
development assistance to Oman in 1996. At the height of that development assistance program in
the 1980s, the United States was giving Oman about $15 million per year in Economic Support
Funds (ESF) in loans and grants, mostly for conservation and management of Omani fisheries
and water resources.)
Oman is eligible for grant U.S. excess defense articles (EDA) under Section 516 of the Foreign
Assistance Act. It received 30 U.S.-made M-60A3 tanks in September 1996 on a “no rent” lease
basis (later receiving title outright). There have been minor EDA grants since 2000, particularly
gear to help Oman monitor its borders and waters and to improve inter-operability with U.S.
forces. In 2004, it turned down a U.S. offer of EDA U.S.-made M1A1 tanks. Some Omani
officers say they need new armor to supplement the 38 British-made Challenger 2 tanks and 80
British-made Piranha armored personnel carriers Oman bought in the mid-1990s.
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Table 1. Recent U.S. Aid to Oman
(In millions of dollars)
FY2003 FY2004 FY2005 FY2006 FY2007 FY2008
FY2009
FY2010
(request)
IMET 0.75 0.83 1.14 1.14 1.11 1.43 1.45 1.65
FMF
80.0 24.85 19.84 13.86 13.49 4.712 7.0 16.62
NADR
.40 0.554 0.4 1.28 1.593 0.95 2.0
Note: IMET is International Military Education and Training; FMF is Foreign Military Financing; NADR is
Nonproliferation, Anti-Terrorism, De-Mining and Related Programs, and includes ATA (Anti-Terrorism Assistance);
EXBS (Export Control and Related Border Security); and TIP (Terrorism Interdiction Program).
Cooperation Against Islamic Militancy
Since September 11, 2001, Oman has cooperated with U.S. legal, intelligence, and financial
efforts against terrorism. According to the State Department report on global terrorism for 2008,
released April 30, 2009 (latest available), Oman “proactively implemented counterterrorism
strategies and cooperated with neighboring countries to prevent terrorists from moving freely
throughout the Arabian Peninsula.” This language was very similar to that used in the same report
the prior year. Among Oman’s recent steps was a January 2007 law establishing a National
Committee for Combating Terrorism, a December 2006 agreement with Saudi Arabia to control
cross-border transit, and the establishment of a financial intelligence unit of the Directorate of
Financial Crimes of the Royal Omani Police. In September 2008, it strengthened its anti-money
laundering program by requiring non-banking establishments to verify the identify of their clients
and document financial transactions.
On November 22, 2005, Oman joined the U.S. “Container Security Initiative,” agreeing to pre-
screening of U.S.-bound cargo from its port of Salalah for illicit trafficking of nuclear and other
materials, and for terrorists. Table 1 includes U.S. aid to Oman ( Non-Proliferation, Anti-
Terrorism and Related Programs funds, NADR) to help it establish effective export controls, to
sustain its counter-terrorism training capabilities, and to help control movements of illegal
immigrants across its borders.
Democratization and Human Rights4
Oman remains a monarchy in which decision-making still is largely concentrated with Sultan
Qaboos. Some Omanis, particularly younger, well-educated professionals, consider the pace of
liberalization too slow, but many older Omanis compare the current degree of “political space”
4 Information in this section is from several State Department reports: The Human Rights report for 2008 (February 25,,
2009); the International Religious Freedom Report for 2009 (October 26, 2009); and the Trafficking in Persons Report
for 2009 (June 16, 2009). See also: Carpenter, J. Scott and Simon Henderson. Democracy in Slow Motion: Oman Goes
to the Polls. Washington Institute for Near East Policy, PolicyWatch 1298. October 26, 2007.
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favorably with that during the reign of the Sultan’s father. Under the Sultan’s father, Omanis
needed the Sultan’s approval to wear spectacles, for example. Some Omanis, even some within
the government and official establishment, note that some top positions are now filled by former
security officials, replacing academics or other professionals. Others saw progress in the holding
in April 2009 of a two-day workshop in Muscat to discuss freedom of speech.5
Election History
As in the other Gulf states, formal political parties are not allowed. Unlike Bahrain or Kuwait,
there are no clear “currents” or factions within the (now) elected Consultative Council (Majlis As
Shura). Qaboos has constrained the Council’s authority to mostly public works and social benefits
issues. It does not draft legislation, lacks binding legislative powers, and some Omanis say the
Council’s influence over policy has diminished over time—to the point where many experts now
say Oman lags the other Gulf states on political liberalization. In a 1996 “Basic Law,” Qaboos
made the “legislature” bicameral by appointing a “State Council” to serve, in part, as a check and
balance on the elected Consultative Council. Together, the two bodies constitute the “Oman
Council.” The State Council, still entirely appointed, now has 70 seats, up from the original 53
seats.
The slow pace of political liberalization concerns some observers because Qaboos was one of the
first Gulf monarchs to embark on political liberalization. He did so in the 1980s, under no evident
public pressure to do so, in the belief that Omanis would ultimately demand political reform. In
November 1991, he appointed a 59-seat Consultative Council (expanded to its current size of 84
seats in 1993), replacing a 10-year-old advisory council. In a move toward a popular selection
process, in 1994 and 1997 “notables” in each of Oman’s districts chose up to three nominees,
with Qaboos making a final selection for the Council. The first direct elections to the Consultative
Council were held in September 2000 (three-year term), but the electorate was limited (25% of all
citizens over 21 years old). In November 2002, Qaboos extended voting rights to all citizens,
male and female, over 21 years of age and the October 4, 2003 Consultative Council elections—
in which 195,000 Omanis voted (74% turnout)—resulted in a Council similar to that elected in
2000, including the election of the same two women as in the previous election (out of 15 women
candidates).
Qaboos appoints the Consultative Council president (he appointed a new president in September
2007, replacing a 16-year incumbent), although the Consultative Council chooses two vice
presidents. In the October 27, 2007 election, Qaboos allowed, for the first time, public
campaigning. Turnout among 388,000 registered voters was 63%, including enthusiastic
participation by women, but none of the 21 female candidates (out of 631 candidates) won. The
State Council appointed following the 2007 election has 14 women, up from nine previously. The
next elections for the Consultative Council are to take place in October 2011.
5 Slackman, Michael. “With Murmurs of Change, Sultan Tightens His Grip.” New York Times, May 15, 2009.
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Broader Human Rights Issues
On related human rights issues, press criticism of the government is tolerated, but criticism of the
Sultan is not. In December 2004, the government arrested 31 Ibadhi Muslims on suspicion of
conspiring to establish a religious state, but Qaboos pardoned them in June 2005. Private
ownership of radio and television stations is prohibited, but the availability of satellite dishes has
made foreign broadcasts accessible to the public. The State Department notes improving workers’
rights, in conjunction with the U.S.-Oman FTA, and the labor laws permit collective bargaining
and prohibits employers from firing or penalizing workers for union activity. U.S. funds from the
Middle East Partnership Initiative have been used to fund civil society and political process
strengthening, judicial reform, election management, media independence, and women’s
empowerment.
Religious Freedom
The 1996 Basic Law affirmed Islam as the state religion, and the State Department’s religious
freedom report for 2009 notes “no change in the status of respect for religious freedom” during
the reporting period, but “the Government did lift previously imposed limitations on the number
of religious workers in the country and shortened the process for granting permission to religious
leaders to enter the country from two months to one week.” Non-Muslims are free to worship at
temples and churches built on land donated by the Sultan, but there are some limitations on non-
Muslims’ proselytizing and on religious gatherings in other than government-approved houses of
worship. Members of all religions and sects are free to maintain links with coreligionists abroad
and travel outside Oman for religious purposes.
Advancement of Women
Qaboos has given major speeches on the equality of women and their importance in national
development, and they now constitute about 30% of the work force. In March 2003, he named a
woman to the rank of minister, giving that rank to a woman in charge of the national authority for
industrial craftsmanship. In 2004, he added three female ministers—of higher education, of
tourism, and of social development—and these ministries remain headed by women. In April
2004, Qaboos made five women among the 29 appointees to the public prosecutors office. The
Ambassador to the United States is a female. However, allegations of spousal abuse and domestic
violence are fairly common, with women finding protection primarily through their families.
Omani women also continue to face social discrimination often as a result of the interpretation of
Islamic law.
Trafficking in Persons
On November 17, 2008, Oman set up its first human rights commission as an “autonomous body”
attached to the State Council (upper body of the legislature). The move came one month after
President Bush determined (P.D. 2009-5) that Oman be moved from “Tier 3” on trafficking in
persons (worst level, assessed in the June 4, 2008 State Department report on that issue), to “Tier
2/Watch List.” In the latest such report, issued June 16, 2009, Oman’s “grade” further improved
to Tier 2, based on an assessment that Oman is making significant efforts to comply with
minimum standards for the elimination of trafficking and its completion within the past year of
prosecutions for those trafficking in persons.
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Regional Relations
Oman’s leader, Sultan Qaboos bin Said Al Said, has often pursued foreign policies outside an
Arab or Gulf consensus. Some of its stances, such as that toward Iran, have appeared at odds with
U.S. policy, while on other of its positions, such as on the Arab-Israeli dispute, Oman has been
among the most supportive of the Gulf states.
Iran
Of the Gulf states, Oman is perceived as political closest to and the least critical of Iran. Qaboos o
visited Tehran in August 2009, his first visit there since the 1979 Islamic revolution. He went
forward with the visit even though the June 2009 reelection of President Mahmoud Ahmadinejad
was widely challenged in Iran as fraudulent and the alleged fraud stimulated large protests in
Tehran and other cities. To this extent, the Qaboos visit was viewed as a sign of Oman’s
endorsement of Ahmadinejad’s reelection. Qaboos sees no inconsistency between Oman’s
alliance with the United States and its friendship with Iran. This relationship has proved useful to
the United States in the past; Oman was an intermediary through which the United States returned
Iranian prisoners captured during U.S.-Iran skirmishes in the Persian Gulf in 1987-1988. Oman’s
attempts to steer a middle ground caused problems for Oman in April 1980 when, within days of
signing the agreement allowing the United States military to use several Omani air bases, the
United States used these facilities—reportedly without prior notification to Oman—to launch the
abortive mission to rescue the U.S. Embassy hostages seized by Iran in November 1979.6
Some accounts say that Oman is in the process of drawing closer to Iran than it has previously.
Oman, as do the other GCC states, publicly opposes any U.S. attack on Iran’s nuclear facilities,
but Oman has furthermore rebuffed efforts by the other Gulf states to persuade Oman to distance
itself from Iran politically. Oman reportedly is discussing a security pact with Iran, although the
scope is as yet undefined.7 In addition, Oman’s government is said to turn a blind eye to the
smuggling of a wide variety of goods to Iran from Oman’s Musandam Peninsula territory. The
trade is illegal in Iran because the smugglers avoid paying taxes in Iran, but Oman’s local
government collects taxes on the goods shipped.8 Iran and Oman are in discussions about
potential investments to develop Iranian offshore natural gas fields that adjoin Oman’s West
Bukha oil and gas field in the Strait of Hormuz. The Omani field began producing oil and gas in
February 2009.
The question many observers ask is why is Oman not as wary of Iran as are the other GCC states.
Oman has no sizable Shiite community with which Iran could meddle in Oman, so the fear of
Iranian interference is less pronounced. There are also residual positive sentiments pre-dating
Iran’s Islamic revolution. Oman still appreciates the military help the Shah of Iran provided in
helping end a leftist revolt in Oman’s Dhofar Province during 1964-1975. Others attribute
Oman’s position on Iran to its larger concerns that Saudi Arabia has sought to spread its Wahhabi
6 CRS conversations with U.S. Embassy officials in Oman. 1995-2003.
7 Slackman, Michael. “Oman Navigates Risky Strait Between Iran and Arab Nations.” New York Times, May 16, 2009.
8 Ibid.
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form of Islam into Oman, and Oman sees Iran as a rival to and potential counterweight to Saudi
Arabia.
Iraq
On Iraq, and generally in line with other GCC states, Omani officials say that the Omani
government and population are dismayed at the Shiite Islamist domination of post-Saddam Iraq
and its pro-Iranian tilt. Yet, despite moves by most of the other GCC states to normalize relations
with Iraq, Oman has not appointed an ambassador in Baghdad. (Saudi Arabia also has not opened
a full embassy in Iraq.) Oman provided about $3 million to Iraq’s post-Saddam reconstruction, a
relatively small amount compared to some of the other Gulf states.
Arab-Israeli Issues
On the Arab-Israeli dispute, in a stand considered highly supportive of U.S. policy, Oman was the
one of the few Arab countries not to break relations with Egypt after the signing of the Egyptian-
Israeli peace treaty in 1979. All the GCC states participated in the multilateral peace talks
established by the 1991 U.S.-sponsored Madrid peace process, but only Oman, Bahrain, and
Qatar hosted working group sessions of the multilaterals. Oman hosted an April 1994 session of
the working group on water and, as a result of those talks, a Middle East Desalination Research
Center was established in Oman. Participants in the Desalination Center include Israel, the
Palestinian Authority, the United States, Japan, Jordan, the Netherlands, South Korea, and Qatar.
In September 1994, Oman and the other GCC states renounced the secondary and tertiary Arab
boycott of Israel. In December 1994, it became the first Gulf state to officially host a visit by an
Israeli Prime Minister (Yitzhak Rabin), and it hosted then Prime Minister Shimon Peres in April
1996. In October 1995, Oman exchanged trade offices with Israel, essentially renouncing the
primary boycott of Israel. However, there was no move to establish diplomatic relations. The
trade offices closed following the September 2000 Palestinian uprising.
Oman has expressed an openness to renewing trade ties with Israel if there is progress on Israeli-
Palestinian issues. In an April 2008 meeting in Qatar, Omani Foreign Affairs Minister Yusuf bin
Alawi bin Abdullah informed then Israeli Foreign Minister Tzipi Livni that the Israeli trade office
in Oman would remain closed until agreement was reached on a Palestinian state, although the
meeting itself represented a level of diplomatic outreach by Oman to Israel. There was little
follow-up thereafter and Oman, like many other Arab states, considers Israeli Prime Minister
Benjamin Netanyahu, who took office in February 2009, opposed to a fair settlement for
Palestinians. Still, indicating that the issue remains open, several Israeli officials reportedly
visited Oman in November 2009 to attend the annual conference of the Center, although the
Israeli delegation also held talks with Omani officials on the margins of the conference.9
Oman did attend a January 2009 meeting in Qatar called to support Hamas, then at war with
Israel in the Gaza strip, which Hamas controls. Oman’s attendance, to certain extent, defied a
9 Ravid, Barak. “Top Israeli Diplomat Holds Secret Talks in Oman.” Haaretz, November 25, 2009.
http://www.haaretz.com/hasen/spages/1130242.html
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boycott of the meeting by Saudi Arabia and Egypt, which considered the meeting a political boost
to Iran, which is among Hamas’ staunchest regional supporters.
Yemen
Oman’s relations with neighboring Yemen have traditionally been troubled, but there are signs of
stability over the past decade. The former People’s Democratic Republic of Yemen (PDRY),
considered Marxist and pro-Soviet, supported Oman’s Dhofar rebellion in the 1960s and early
1970s. Oman-PDRY relations were normalized in 1983, but there were occasional border clashes
between the two later in that decade. Relations improved after 1990, when PDRY merged with
North Yemen to form the combined modern day Republic of Yemen. In September 2008, the two
countries began discussions to form a regional center to combat piracy. In May 2009, Oman
signaled support for Yemen’s integrity and the government of President Ali Abdullah Saleh by
withdrawing the Omani citizenship of southern Yemeni politician Ali Salim Al Bidh, who is
believed to be stoking separatist sentiment in south Yemen.
Economic and Trade Issues10
Despite Omani efforts to diversify its economy, oil exports generate about 60% of government
revenues. Oman has a relatively small 5.5 billion barrels of proven oil reserves, enough for about
15 years, and some energy development firms say that production at some Omani fields is
declining.11 Oman exports about 222 million barrels per year of oil (less than 3% of
internationally traded oil), of which about 11.5 million are imported by the United States. The
United States is Oman’s fourth largest trading partner, and there was about $2.25 billion in
bilateral trade in 2008. About that same level of bilateral trade was achieved in 2009. Oman has
balked at a Gulf state plan to form a monetary union by 2010.
Oman is not a member of the Organization of Petroleum Exporting Countries (OPEC).
Recognizing that its crude oil fields are aging, Oman is trying to privatize its economy, diversify
its sources of revenue, and develop its liquid natural gas (LNG) sector, for which Oman has
identified large markets in Asia and elsewhere. Gas ventures with Iran that are under discussion
were addressed above, in the section on Iran. Oman has about 30 trillion cubic feet of proven gas
reserves, and in November 2008 it signed a 20-year agreement with Occidental Petroleum to
develop existing gas fields and explore for new ones. Oman is part of the “Dolphin project,”
under which Qatar is exporting natural gas to UAE (by replacing Omani gas supplies, at 135
million cubic feet per day, to the UAE). Oman was admitted to the WTO in September 2000. The
U.S.-Oman Free Trade Agreement was signed on January 19, 2006, and ratified by Congress (P.L.
109-283, signed September 26, 2006).
10 For more information on Oman’s economy and U.S.-Oman trade, see CRS Report RL33328, U.S.-Oman Free Trade
Agreement, by Mary Jane Bolle.
11 Gerth, Jeff and Stephen Labaton. “Oman’s Oil Yield Long in Decline, Shell Data Show.” New York Times, April 8,
2004.
Congressional Research Service
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Oman: Reform, Security, and U.S. Policy
Author Contact Information
Kenneth Katzman
Specialist in Middle Eastern Affairs
kkatzman@crs.loc.gov, 7-7612
Congressional Research Service
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