Oman: Reform, Security, and U.S. Policy
Kenneth Katzman
Specialist in Middle Eastern Affairs
March 1, 2011
Congressional Research Service
7-5700
www.crs.gov
RS21534
CRS Report for Congress
P
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. It was partly in appreciation for this alliance that the United States entered into a free trade
agreement (FTA) with Oman. The FTA was considered pivotal to helping Oman diversify its
economy to compensate for its relatively small reserves of crude oil.
Perhaps because of the extensive benefits the alliance with Oman provides to U.S. Persian Gulf
policy, successive U.S. Administrations have tended not to criticize Oman’s relatively close
relations with Iran. Oman has a tradition of cooperation with Iran dating back to the Shah of
Iran’s regime and Oman has always been less alarmed by the perceived threat from Iran than have
the other Gulf states. Oman’s leaders view 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 that supports Shiite and some other hardline Islamist movements. Still, there is a
long-standing assumption among U.S. policymakers that, in the event of U.S.-Iran confrontation,
Oman would at least tacitly back the United States.
Another major U.S. priority in the Gulf region has been the promotion of human rights and
democracy and the empowerment of civil society. The United States has praised Sultan Qaboos
bin Sa’id Al Said for opening up the political process in Oman, beginning this initiative in the
early 1980s, long before the issue was highlighted by the United States. The political
liberalization has given citizens the opportunity to express their views on issues but has not
significantly limited Qaboos’ role as major decision maker. Some Omani human rights activists
and civil society leaders, along with many younger Omanis, who have always been unsatisfied
with the implicit and explicit limits to political rights in Oman, believe the democratization
process has stagnated over the past five years. This disappointment within Oman may have
proved deeper and broader than most experts believed when protests broke out in several Omani
cities in late February 2011, apparently sparked by grievances similar to those that toppled
Egyptian President Hosni Mubarak on February 11.
For further information on regional dynamics that affect Oman, see CRS Report RL32048, Iran:
U.S. Concerns and Policy Responses
, by Kenneth Katzman.
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Oman: Reform, Security, and U.S. Policy

Contents
Introduction ................................................................................................................................ 1
Democratization and Human Rights ............................................................................................ 3
Election History .................................................................................................................... 4
Broader Human Rights Issues ............................................................................................... 5
Religious Freedom .......................................................................................................... 5
Advancement of Women ................................................................................................. 5
Trafficking in Persons ..................................................................................................... 6
Evidence of Dissatisfaction: February 2011 Unrest................................................................ 6
Defense and Security Ties ........................................................................................................... 6
Oman’s Capabilities and U.S. Security Assistance ................................................................. 8
Cooperation Against Islamic Militancy.................................................................................. 9
Cooperation on Regional Stability....................................................................................... 10
Iran............................................................................................................................... 10
Iraq............................................................................................................................... 11
Arab-Israeli Issues ........................................................................................................ 11
Yemen .......................................................................................................................... 12
Economic and Trade Issues ....................................................................................................... 13

Figures
Figure 1. Map of Oman ............................................................................................................... 3

Tables
Table 1. Some Key Facts on Oman.............................................................................................. 2
Table 2. Recent U.S. Aid to Oman............................................................................................... 9

Contacts
Author Contact Information ...................................................................................................... 13

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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 in Oman, 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.
Sultan 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.
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Table 1. Some Key Facts on Oman
Population
2.97 million, which includes 577,000 expatriates (July 2010 estimate)
Religions
Ibadhi Muslim, 75%; other, 25% (Sunni Muslim, Shiite Muslim, Hindu)
GDP (purchasing power
$69.5 billion (2009)
parity, PPP)
GDP per capita (PPP) $23,900 (2009)
GDP Growth Rate
2.7% (2009)
Unemployment Rate
15%
Inflation Rate
3.5% (2009), down from 12.5% in 2008
Exports $27.65
billion (2008). Main export markets (in decreasing order of dollar value):
China, South Korea, UAE, Japan, Thailand
Imports
$18.5 billion (2009). Main import sources (in decreasing order of dollar value):
UAE, Japan, United States, China, India, South Korea, Germany
Oil Production
860,000 barrels per day
Oil Reserves
5 – 5.5 billion barrels
Oil Exports
750,000 barrels per day (bpd)
Natural Gas Production
875 billion cubic feet/yr
Natural Gas Reserves
30 trillion cubic feet
Natural Gas Exports
407 billion cubic feet/yr
Foreign Exchange and
$12.2 billion (as of the end of 2009)
Gold Reserves
Energy Structure
Petroleum Development Oman (PDO) controls most oil and natural gas resources.
PDO is a partnership between the Omani government (60%), Royal Dutch Shel
(34%), Total (4%), and Partx (2%). Oman Oil Company is the investment arm of the
Ministry of Petroleum.
Sources: CIA, The World Factbook, June 28, 2010; Oman National budget press statement provided by Embassy
of Oman in Washington, DC, January 2010; Energy Information Administration Country Analysis Brief, February
2011.
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Figure 1. Map of Oman

Source: CRS.

Democratization and Human Rights1
Oman remains a monarchy in which decision-making still is largely concentrated with Sultan
Qaboos, even though he has a reputation for benevolence. Some Omanis, particularly younger,
well-educated professionals, consider the pace of liberalization too slow, but many older Omanis

1 Information in this section is from several State Department reports: The Human Rights report for 2009 (March 11,
2010); the International Religious Freedom Report for 2010 (November 17, 2010); and the Trafficking in Persons
Report for 2010 (June 14, 2010). 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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compare the current degree of “political space” 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.2 However, evidence that the pace of change
has been slow was portrayed in February 2011 when protests broke out in several cities,
following unrest sweeping other parts of the region.
Election History
The electoral process in Oman has advanced incrementally, but, even so the process applies to a
legislative body with limited powers. Sultan Qaboos has constrained the authority of the elected
84-seat Consultative Council (Majlis As Shura) to mostly economic and social 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. As in the other Gulf
states, formal political parties are not allowed. Unlike Bahrain or Kuwait, there are no clear
currents or factions within either of the two chambers that make up the Oman Council.
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 (then a 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).
In the October 27, 2007, election (after changing to a four-year term), 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. 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.
The State Council, still entirely appointed, now has 70 seats, up from the original 53 seats. The
State Council appointed following the 2007 election has 14 women, up from nine previously. The
next elections and State Council appointments are to take place in October 2011.

2 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, the State Department human rights report for 2009 says that “the
government generally respect[s] the human rights of its citizens.” Press criticism of the
government is tolerated, but criticism of the Sultan is not. Private ownership of radio and
television stations is not prohibited, but there are very few privately owned stations, with the
exception of Majan TV, and three radio stations: HiFM, HalaFM, and Wisal. However,
availability of satellite dishes has made foreign broadcasts accessible to the public. There are
some legal or practical restrictions to Internet usage, and only about 8-13% of the population has
subscriptions to Internet service. Many Internet sites are blocked, primarily for offering sexual
content, but many Omanis are able to bypass restrictions by accessing their Internet over smart
cell phones.
On labor issues, 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, but provides for freedom to practice
religious rites as long as doing so does not disrupt public order. The State Department’s religious
freedom report for 2010 noted “no change in the status of respect for religious freedom by the
government during the reporting period.” 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.
All religious organizations must be registered with the Ministry of Endowments and Religious
Affairs (MERA). Among non-Muslim sponsors recognized by MERA are: the Protestant Church
of Oman; the Catholic Diocese of Oman; the al Amana Center (interdenominational Christian);
the Hindu Mahajan Temple; and the Anwar al-Ghubairia Trading Co. Muscat (for the Sikh
community). The government agreed in principle to allow Buddhists to hold meetings if they
could find a corporate sponsor, but the community was unable to do so by late 2010. Members of
all religions and sects are free to maintain links with coreligionists abroad and travel outside
Oman for religious purposes. Private media have occasionally published anti-Semitic editorial
cartoons.
Advancement of Women
Sultan 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. Since 2004, there
have been four women of ministerial rank, of whom three are in the cabinet (the ministers of
higher education, of tourism, and of social development). They were joined in February 2011 by a
new minister of education, as discussed below. The first woman ever of ministerial rank in Oman
was appointed in March 2003; she heads the national authority for industrial craftsmanship. In
April 2004, Qaboos placed five women among the 29 appointees to the public prosecutors office.
Also, the U.S. ambassador is a woman.
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However, at the citizen level, 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—
and was viewed as a response to—a determination by President Bush (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 14,
2010, Oman’s “grade” remained at Tier 2—the level it was assigned in the 2009 report. This
ranking is based on an assessment that Oman is making significant efforts to comply with
minimum standards for the elimination of trafficking and its prosecutions for those trafficking in
persons. Still, Oman is considered a destination and transit country for men and women primarily
from South and East Asia, in conditions indicative of forced labor.
Evidence of Dissatisfaction: February 2011 Unrest
Although observers have long assessed Sultan Qaboos as popular and Omanis as willing to
overlook the limits to their political rights, there was evidence in February 2011 that many are
dissatisfied. About two weeks after Egyptian protests toppled President Hosni Mubarak, protests
broke out in the northern industrial town of Sohar, Oman. On February 26, 2011, several hundred
demonstrators gathered there demanding better pay and more job opportunities; two were killed
when security forces fired rubber bullets. Protests expanded in Sohar over the next few days,
including the burning of cars and some shops, and spread to the capital, Muscat. Although most
protesters say their demonstrations are motivated by economic factors, some say they want the
powers of the Majles expanded to approximate those of a Western legislature. Few, if any, appear
to be calling for Qaboos to step down. Some protests were continuing in Sohar as of March 1,
including some camping in the city’s main square, although observers said that demonstrations
had mostly ceased in Muscat as of March 1. There have been calls for additional protests
throughout Oman on March 2.
Sultan Qaboos has sought to prevent the protests from expanding further. On February 26, as
soon as the protests broke out, he reshuffled his cabinet by replacing or reassigning six sitting
ministers. He added a woman (Madiha bint Ahmad bin Nasser) to the cabinet as education
minister. He has since sent representatives to meet with protesters, ordered that 50,000 new jobs
be created immediately, and ordered that about $400 be given to each job seeker. He also has
decreed that the office of public prosecutor will have independence from government control and
that there will be new consumer protections. These moves followed a mandated increase in
private sector minimum wages of 43% in early February.
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
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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.
embassy hostages in Iran. During the September 1980 – August 1988 Iran-Iraq war, the United
States built up naval forces in the Gulf to prevent Iranian attacks on international shipping. Oman
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 that war.
Under the U.S.-Oman access agreement, which was renewed in 1985, 1990, 2000, and 2010, 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.3 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).4
In conjunction with negotiations to renew the agreements, which were to expire at the end of
2010, the U.S. military 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. 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
DOD authorization act for FY2011 (H.R. 6523) did authorize $69 million in military construction
funding for the Musnanah facility. Although the authorization act was presented to the president
for signature on December 29, 2010, the issue did not jeopardize the November 2010, renewal of
the access agreements,5 which occurred prior to the passage of that legislation. Following the
renewal, on December 5, 2010, Secretary of Defense Gates visited Oman and met with Qaboos
and Minister of State for Defense Badr bin Saud bin Harib al-Busaidi (distant relative of Qaboos)
to discuss regional issues, reportedly including Iran and the U.S.-led mission in Afghanistan.
Gates also visited the aircraft carrier U.S.S. Abraham Lincoln operating in the Arabian Sea off the
coast of Oman.6
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 used more extensively for OIF. There are
approximately 35 U.S. military personnel in Oman, 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. On February 24, 2011, Oman hosted Chairman of the

3 Hajjar, Sami. U.S. Military Presence in the Gulf: Challenges and Prospects. U.S. Army War College, Strategic
Studies Institute. P. 27.
4 Finnegan, Philip. “Oman Seeks U.S. Base Upgrades.” Defense News, April 12, 1999.
5 Author conversation with State Department officer responsible for Oman. January 6, 2011.
6 Gates Meets With Leaders in Oman, Plans Carrier Visit. American Forces Press Service, December 5, 2010.
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Joint Chiefs of Staff Admiral Michael Mullen for meetings with Omani senior defense leaders
and discussions there on Afghanistan and Pakistan with Admiral Mullen’s chief Pakistani
counterpart, Chief of Army Staff Gen. Ashfaq Kayani.7
Oman’s Capabilities and U.S. Security Assistance8
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
the British military, 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 have been 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. As
part of that effort, the Defense Security Cooperation Agency (DSCA) notified Congress on
August 4, 2010, of a potential sale to Oman of up to 18 additional F-16s and associated
equipment and support. The sale could be worth up to $3.5 billion to the main manufacturer,
Lockheed Martin. Earlier, 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 November 2010, DSCA notified Congress of a possible sale of up to $76 million
worth of countermeasures equipment and training to protect the C-130J that Oman is buying from
Lockheed. The prime manufacturer of the countermeasures equipment is Northrop Grumman.
Regarding purchases from other countries, in the past three years, Oman has continued to buy
some British equipment, including Typhoon fighter aircraft and patrol boats. 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

7 “Mullen, Mattis Meet With Omani Counterparts.” American Forces Press Service. February 24, 2011.
8 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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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.
Table 2. Recent U.S. Aid to Oman
(In millions of dollars)

FY2003 FY2004
FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011
FY2012
(est.)
(request)
IMET 0.75
0.83 1.14 1.14 1.11 1.43 1.45 1.525 1.65 1.65
FMF
80.0
24.85 19.84 13.86 13.49 4.712 7.0 11.85
13.0
9.5
NADR


.40 0.554 0.4 1.28 1.593 0.95 1.655
1.5

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 2009,
released August 5, 2010, Oman “continued to be proactive in implementing counterterrorism
strategies and cooperating with neighboring countries to prevent terrorists from entering or
moving freely throughout the Arabian Peninsula.” This language was nearly identical to that used
in the same report the prior year. The latest State Department report credits Oman with convicting
and sentencing to life in prison an Omani businessman, Ali Abdul Aziz al-Hooti, for helping to
plan terrorist attacks in Oman and for helping to fund a Pakistan-based terrorist group Lashkar-e-
Tayyiba. Other relatively recent steps include Oman’s enactment of 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. In December 2004, the
government arrested 31 Ibadhi Muslims (Omani citizens) on suspicion of conspiring to establish a
religious state, but Qaboos pardoned them in June 2005.
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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 2 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.
Cooperation on Regional Stability
Sultan Qaboos 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. Other of its positions,
such as on the Arab-Israeli dispute, have been highly supportive of U.S. policy, sometimes to the
extent of alienating other Arab leaders.
Iran
Of the Gulf states, Oman is perceived as politically closest to and the least critical of Iran. 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 reprised this intermediary role on
September 14, 2010, when Iran released U.S. citizen Sara Shourd, a hiker who was arrested with
two friends in July 2009 for crossing from Iraq onto Iranian territory. U.S. State Department
spokesman publicly confirmed that Oman had played a brokering role in her release, possibly
including paying her $500,000 bail to Iranian authorities, and she flew to Oman after her release.
Omani diplomats have since reportedly been negotiating with Iran for the release of the other two
hikers, Josh Fattal and Shane Bauer, the latter of which had become Sara Shourd’s fiancé during
their incarceration.
At other times, Oman’s attempts to steer a middle ground between Iran and the United States has
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 1979.9
Some accounts say that Oman is in the process of drawing closer to Iran than it has previously.
Sultan Qaboos last 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 by large numbers of
demonstrators in Tehran and in other cities. To this extent, the Qaboos visit was viewed as a sign
that Oman was endorsing—or at least deciding to set aside the issue of—Ahmadinejad’s
reelection.
Oman, as have the other GCC states, has long publicly opposed any U.S. attack on Iran’s nuclear
facilities. Not only has Oman rebuffed efforts by the other Gulf states to persuade Oman to

9 CRS conversations with U.S. Embassy officials in Oman. 1995-2003.
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distance itself from Iran politically, 10 but, on August 4, 2010, it reportedly signed a security pact
with Iran. 11 The pact reportedly commits the two to hold joint military exercises at some point.
The United States did not criticize Oman’s entry into this pact with Iran, possibly believing that
the agreement will not result in much significant new cooperation between the two. The 2010
pact follows an earlier pact, signed in August 2009, that focused on cooperating against
smuggling across the Gulf of Oman, which separates the two countries. The Oman-Iran pacts
were ratified by Iran’s Majles (parliament) on December 20, 2010.
Economically, the two conduct formal trade, supplemented by the informal trading relations that
have long characterized the Gulf region. 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.12 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
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 done
so.) This possibly could be attributed to security concerns; a shooting outside Oman’s embassy in
Baghdad in November 2005 wounded four, including an embassy employee. 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

10 Slackman, Michael. “Oman Navigates Risky Strait Between Iran and Arab Nations.” New York Times, May 16,
2009.
11 Iran, Oman Ink Agreement of Defensive Cooperation. Tehran Fars News Agency, August 4, 2010.
12 Ibid.
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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 settlement that would be
acceptable to the Palestinians. However, Oman reiterated its offer to resume trade contacts with
Israel if Israel agree to at least a temporary halt in Israeli settlement construction in the West
Bank. Israel did suspend such activity but the suspension was lifted in September 2010; Israel and
Oman have not resumed trade office exchanges. Still, suggesting Oman does not forswear all
contact with Israel, several Israeli officials reportedly visited Oman in November 2009 to attend
the annual conference of the Desalination Center, and the Israeli delegation held talks with Omani
officials on the margins of the conference.13
Although not a major broker among Palestinian factions, Oman attended 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 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. Oman’s attendance could be explained by Oman’s friendly relations with
Iran, discussed above.
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.

13 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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Economic and Trade Issues14
Despite Omani efforts to diversify its economy, oil exports generate about 60% of government
revenues. Oman has a relatively small 5.5 billion barrels (maximum estimate) of proven oil
reserves, enough for about 15 years, and some energy development firms say that production at
some Omani fields is declining.15 In 2009, Oman exported about 400 million barrels of oil (about
4% of internationally traded oil), of which about 15 million barrels were imported by the United
States.
The United States is Oman’s fourth largest trading partner, and there was about $1.87 billion in
bilateral trade in 2010, slightly less than the $2.0 billion in trade for 2009. In terms of specific
goods, figures from 2009 are the latest available: of the approximately $1.125 billion in U.S.
exports to Oman that year 2009, about 20% consisted of aircraft and related parts, and another
10% consisted of drilling and oilfield equipment. Of the approximately $907 million worth of
goods imported into the United States from Oman in 2009, $765 million consisted of crude oil—
nearly 85%.
Oman is not a member of the Organization of the 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 “Iran” section. In November 2008, Oman 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). Oman has balked
at a Gulf state plan to form a monetary union by the end of 2010.

Author Contact Information

Kenneth Katzman

Specialist in Middle Eastern Affairs
kkatzman@crs.loc.gov, 7-7612



14 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.
15 Gerth, Jeff and Stephen Labaton. “Oman’s Oil Yield Long in Decline, Shell Data Show. New York Times, April 8,
2004.
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