Oman: Reform, Security, and U.S. Policy
Kenneth Katzman
Specialist in Middle Eastern Affairs
April 13, 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
Prior to the wave of unrest that has swept the Middle East in 2011, the United States had
consistently praised Sultan Qaboos bin Sa’id Al Said for opening up the political process in the
Sultanate of Oman, beginning this initiative in the early 1980s without prompting or pressure
from the citizenry. The gradual liberalization allowed Omanis to express their views on issues but
without significantly limiting 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 had 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. Still, the generally positive views of
Qaboos, coupled with economic measures, appears to have enabled his regime to calm the unrest.
The stakes for the Administration and Congress in Oman’s stability are considerable. 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. 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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Contents
Introduction ................................................................................................................................ 1
Democratization and Human Rights ............................................................................................ 3
Election History .................................................................................................................... 4
Broader Human Rights Issues ............................................................................................... 5
Freedom of Expression/Media......................................................................................... 5
Labor Rights ................................................................................................................... 5
Religious Freedom .......................................................................................................... 5
Advancement of Women ................................................................................................. 6
Trafficking in Persons ..................................................................................................... 6
2011 Unrest: Dissatisfaction, but Not Hunger for Major Change............................................ 7
Defense and Security Ties ........................................................................................................... 7
U.S. Arms Sales and other Security Assistance to Oman........................................................ 8
Arms Purchases by Oman ............................................................................................... 9
U.S. Security Aid and Its Uses......................................................................................... 9
Cooperation Against Islamic Militancy................................................................................ 10
Cooperation on Regional Stability....................................................................................... 11
Iran............................................................................................................................... 11
Iraq............................................................................................................................... 12
Arab-Israeli Issues ........................................................................................................ 12
Yemen .......................................................................................................................... 13
Other GCC Issues: Bahrain ........................................................................................... 14
Economic and Trade Issues ....................................................................................................... 14
Figures
Figure 1. Map of Oman ............................................................................................................... 3
Tables
Table 1. Some Key Facts on Oman.............................................................................................. 2
Table 2. Recent U.S. Aid to Oman............................................................................................. 10
Contacts
Author Contact Information ...................................................................................................... 15
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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.
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
4.5% (2010)
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
863,000 barrels per day
Oil Reserves
5 – 5.5 billion barrels (2011 estimate)
Oil Exports
750,000 barrels per day (bpd)
Natural Gas Production
875 billion cubic feet/yr (2009)
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 and has been considered highly popular.
Along with political reform issues, the question of succession had long been central to observers
of Oman. Qaboos’ brief marriage in the 1970s produced no children and he therefore has not heir
apparent. Succession would be decided by a “Ruling Family Council” of his relatively small Al
1 Information in this section is from several State Department reports: The Human Rights report for 2010 (April 8,
2011); 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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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.
Despite the three-decade long opening of the political process discussed below, in recent years
some Omanis, particularly younger, well-educated professionals, have considered the pace of
liberalization too slow. Many older Omanis, on the other hand, tend to 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. Among those who
have been critical of the pace of political liberalization, some, even within the government and
official establishment, noted that many top positions have been filled in recent years 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 demonstrated in February 2011 when protests
broke out in several cities, following unrest sweeping other parts of the region.
Election History
The electoral and legislative processes in Oman have advanced incrementally. Under a 1996
“Basic Law,” Qaboos created a bicameral “legislative” body called the Oman Council—
consisting of an elected Consultative Council (Majlis As Shura), and an appointed State Council
(Majlis Ad Dawla). The Consultative Council was first established in November 1991, replacing
a 10-year-old advisory council, and had an initial size of 59 seats. It has been gradually expanded
and now has 84 elected members. The State Council, which had 53 members at inception, now
has 71 appointed members.
However, the Oman Council’s scope of authority has been constrained. It was not given power to
draft legislation, lacked binding power to overturn the Sultan’s decrees or government
regulations, and was generally is confined to economic and social issues. Within the Oman
Council, the State Council served as a further check and balance on actions by the Consultative
Council, although some believe it acted to limit impulsive excess of the elected body. Some
Omanis say the Oman Council’s influence over policy had diminished over time—to the point
where many experts said Oman was lagging the other Gulf states on political liberalization. As
part of its reaction to 2011 unrest, however, on March 13, 2011, Qaboos issued a decree granting
the Oman Council legislative and regulatory powers, although it remains unclear the extent to
which this decree will be implemented in practice.
Beyond expanding the size of the two chambers, Qaboos has gradually enfranchised Omanis to
select the membership of the elected Consultative Council. In the 1994 and 1997 selection cycles
for the Council, “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 it 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).
2 Slackman, Michael. “With Murmurs of Change, Sultan Tightens His Grip.” New York Times, May 15, 2009.
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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, Shaykh Ahmad bin Mohammad Al Isa’i, replacing a 16-year incumbent),
although the Consultative Council chooses two vice presidents. On March 17, 2011, two new vice
presidents were selected by the Council membership—Yunis bin Sabil Al Balushi, and Abdullah
bin Khalifa Al Majali. The next elections and State Council appointments are to take place in
October 2011.
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.
Broader Human Rights Issues
On related human rights issues, the State Department human rights report for 2010 repeated
previous years’ assertions that “the government generally respect[s] the human rights of its
citizens.” However, there are restrictions by law, by custom, and in practice. On November 17,
2008, Oman set up its first human rights commission as an “autonomous body” attached to the
State Council. U.S. funds from the Middle East Partnership Initiative and the Near East Regional
Democracy account (both State Dept. accounts) have been used to fund civil society and political
process strengthening, judicial reform, election management, media independence, and women’s
empowerment.
Freedom of Expression/Media
Press criticism of the government is tolerated, but criticism of the Sultan (and by extension,
government officials in general) 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.
Labor Rights
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. Workers have the legal right to strike, but strikes
are subject to requirements, including an absolutely majority of workers in an enterprise needed
to call a strike. Labor rights are regulated by the Ministry of Manpower.
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
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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.
There are 14 women in the State Council, appointed following the 2007 election, up from nine
previously. However, as noted, no woman was elected to the Consultative Council in 2007,
reducing the female representation from the two that had been selected in the previous several
cycles.
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
In October 2008, President Bush directed (Presidential Determination 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.” That determination was made on the
basis of Omani pledges to increase efforts to counter trafficking in persons. 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. The 2009 and 2010 rankings were 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.
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2011 Unrest: Dissatisfaction, but Not Hunger for Major Change
Although observers have long assessed Omanis as willing to overlook the limits to their political
rights, evidence appeared in February 2011 that many Omanis 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 said their
demonstrations were motivated by economic factors—particularly a lack of available good jobs—
some say they wanted the powers of the Majles expanded to approximate those of a Western
legislature. However, few, if any, called for Qaboos to step down, even after the deaths of some
protesters. Some protesters even displayed posters with his picture. Protests continued in Sohar
and in Muscat throughout most of March, including establishment of an encampment in the
Sohar’s main square.
The U.S. reaction to the unrest in Oman was muted, possible because Oman is a key ally of the
United States and perhaps because the unrest appeared minor compared to other countries in the
region. There were no critical U.S. statements issued about the Omani response.
By the end of March, Qaboos appeared to have calmed the unrest through a series of measures.
On the one hand, on March 29, 2011, he sent security forces to clear the protesters from their
gathering places in Sohar. However, he also tried to address grievances in several ways, including
with a minor cabinet reshuffle on February 26 and then a more extensive change of 12 out of 29
ministries on March 7, 2011. In the first of the cabinet changes, he added a woman (Madiha bint
Ahmad bin Nasser) as education minister. He also sent representatives to meet with protesters,
ordered that 50,000 new public sector jobs be created immediately, raised the minimum wage by
about one third (to about $520 per month), and ordered that about $400 be given to unemployed
job seekers. He also decreed that the office of public prosecutor will have independence from
government control, that there will be new consumer protections, and, as noted above, expanded
the powers of the Oman Council. These moves followed an earlier mandated increase in private
sector minimum wages of 43% at the beginning of February.
Although protests largely ceased by April 1 as a result of the crackdown and the economic and
reform steps, there were suggestions that tensions remain high and protests could resume. On
April 7, a small group of protesters outside the Oman Council headquarters in Muscat called for
an investigation of the security forces for the killing of the two protesters in March (see above).
Activists using e-mail and other electronic media called for protests in Sohar on Friday, April 8,
but a heavy security presence prevented fresh protests.
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
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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. 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 the 2010 renewal negotiations, 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
DOD 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 had 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, P.L. 111-
383, signed January 7, 2011) did authorize $69 million in military construction funding for the
Musnanah facility. Perhaps sensing that the Obama Administration was attempting to
accommodate the request, the access agreements were renewed in November 2010.5
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, 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.
U.S. Arms Sales and other Security Assistance to Oman6
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
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 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, 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.
Arms Purchases by Oman
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. Security Aid and Its Uses
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 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. Nonproliferation, Antiterrorism,
Demining, and Related Programs (NADR) funds are used to help Oman develop controls and
train and equip personnel to prevent proliferation and combat terrorism.
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.
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Provision of Excess Defense Articles (EDA)
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
(request) (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 8.85
13.0
9.5
NADR
.40 0.554 0.4 1.28 1.593 0.95 1.655
1.5
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.
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. As discussed above, U.S. aid to Oman (NADR funds) help Oman
establish effective export controls, sustain its counter-terrorism training capabilities, and control
movements of illegal immigrants across its borders.
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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. 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.7 On February 24, 2011, Oman hosted Chairman of the
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.8
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.
7 Gates Meets With Leaders in Oman, Plans Carrier Visit. American Forces Press Service, December 5, 2010.
8 “Mullen, Mattis Meet With Omani Counterparts.” American Forces Press Service. February 24, 2011.
9 CRS conversations with U.S. Embassy officials in Oman. 1995-2003.
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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
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-
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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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 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
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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withdrawing the Omani citizenship of southern Yemeni politician Ali Salim Al Bidh, who is
believed to be stoking separatist sentiment in south Yemen.
Other GCC Issues: Bahrain
Oman, as did the other members of the GCC, fully backed the Al Khalifa regime in Bahrain in its
confrontation with mostly Shiite opposition protests. Oman supported the GCC consensus to send
forces from the GCC joint “Peninsula Shield” unit into Bahrain on March 14, 2011, to provide
backing to the regime’s beleaguered security forces. The GCC Peninsula Shield consisted of
1,000 Saudi forces and 500 UAE police; it is not known if any Omani forces were part of the
contingent that deployed to Bahrain. The GCC countries also decided, in March 2011, to set up a
$20 billion fund to help the two members, Bahrain and Oman, that were facing popular unrest,
with the funds to be used to create jobs and take other steps to ease protester anger.
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) and is
therefore not bound by an oil export quota set by that organization. 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.
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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Author Contact Information
Kenneth Katzman
Specialist in Middle Eastern Affairs
kkatzman@crs.loc.gov, 7-7612
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