Oman: Reform, Security, and U.S. Policy
Kenneth Katzman
Specialist in Middle Eastern Affairs
August 30, 2012
Congressional Research Service
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www.crs.gov
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epared 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 gradually opening the political process
in the Sultanate of Oman in the early 1980s without evident public pressure. The liberalization
allowed Omanis a measure of representation but without significantly limiting Qaboos’ role as
major decision maker. Some Omani human rights activists and civil society leaders, along with
many younger Omanis, were always unsatisfied with the implicit and explicit limits to political
rights and believed the democratization process had stagnated. This disappointment may have
proved deeper and broader than experts believed when protests broke out in several Omani cities
beginning in late February 2011, after the toppling of President Hosni Mubarak of Egypt. The
generally positive Omani views of Qaboos, coupled with economic and minor additional political
reform measures and repression of protest actions, caused the unrest to subside. However,
protests have continued sporadically in 2012. High turnout in the October 15, 2011, elections for
the lower house of Oman’s legislative body suggested the unrest produced a new public sense of
activism, although with public recognition that reform will continue to be gradual.
The Administration did not alter its policy toward Oman during the height of the unrest, perhaps
because Oman is a long-time U.S. ally in the Persian Gulf. It was the first Gulf country to
formally allow the U.S. military to use its bases and other facilities and has done so for virtually
every U.S. military operation in and around the Gulf since 1980, despite the sensitivities in Oman
about a visible U.S. military presence there. Oman is has become a regular buyer of U.S. military
equipment, moving away from its prior reliance on British military advice and equipment. Oman
also has consistently supported U.S. efforts to achieve a Middle East peace by publicly endorsing
peace treaties reached and by occasionally meeting with Israeli leaders in or outside Oman. It was
partly in appreciation for this alliance that the United States entered into a free trade agreement
(FTA) with Oman, which is also intended to help Oman diversify its economy to compensate for
its relatively small reserves of crude oil.
Unlike the other Persian Gulf monarchies, Oman does not perceive a major potential threat from
Iran. Sultan Qaboos has consistently maintained ties to Iran’s leaders, despite the widespread
international criticism of Iran’s nuclear program and foreign policy. Successive U.S.
Administrations have downplayed the Iran-Oman relationship, perhaps in part because Oman has
sometimes been useful as an intermediary between the United States and Iran. Oman played the
role of broker between Iran and the United States, including in the September 2011 release of two
U.S. hikers from Iran after two years in jail there. 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, Human Rights, and 2011 Unrest ......................................................................... 2
Representative Institutions and Election History ...................................................................... 3
Electoral History ................................................................................................................. 4
2011 Unrest: Dissatisfaction, but Not Hunger for Major Change....................................... 4
October 2011: Election Following The Bulk of the Unrest................................................. 5
U.S. Responses.................................................................................................................... 6
Broader Human Rights Issues ................................................................................................... 6
Freedom of Expression/Media ............................................................................................ 7
Labor Rights........................................................................................................................ 7
Religious Freedom .............................................................................................................. 7
Advancement of Women ..................................................................................................... 7
Trafficking in Persons ......................................................................................................... 8
Defense and Security Ties................................................................................................................ 8
U.S. Arms Sales and other Security Assistance to Oman........................................................ 10
Arms Purchases by Oman ................................................................................................. 10
Cooperation Against Islamic Militancy................................................................................... 12
Cooperation on Regional Issues .............................................................................................. 13
Iran .................................................................................................................................... 13
Iraq .................................................................................................................................... 14
Afghanistan ....................................................................................................................... 15
Arab-Israeli Issues............................................................................................................. 15
Yemen................................................................................................................................ 16
Other GCC and Regional Issues: Bahrain, Libya, and Syria ............................................ 16
Border Disputes with UAE ............................................................................................... 17
Economic and Trade Issues............................................................................................................ 17
Economic Aid.................................................................................................................... 18
Figures
Figure 1. Map of Oman.................................................................................................................... 2
Tables
Table 1. Some Key Facts on Oman.................................................................................................. 1
Table 2. Recent U.S. Aid to Oman................................................................................................. 12
Contacts
Author Contact Information........................................................................................................... 18
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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.
Table 1. Some Key Facts on Oman
Population
2.7 million, which includes 816,000 non-citizens
Religions
Ibadhi Muslim, 75%; other, 25% (Sunni Muslim, Shi te Muslim, Hindu)
GDP (purchasing power
$80.9 billion (2011)
parity, PPP)
GDP per capita (PPP)
$26,200 (2011)
GDP Real Growth Rate
4.4% (2011)
Unemployment Rate
15%
Inflation Rate
4.0% (2011), down from 12.5% in 2008
Oil Production
863,000 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
$12.66 billion (end of 2011)
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; Energy Information Administration Country Analysis Brief, 2011.
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Figure 1. Map of Oman
Source: CRS.
Democratization, Human Rights, and 2011 Unrest1
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 the Sultan, who was
1 Information in this section is from several State Department reports: The Human Rights report for 2011 (May 24,
2012); the International Religious Freedom Report for July—December, 2010 (September 13, 2011); and the
Trafficking in Persons Report for 2011 (June 27, 2011).
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born in November 1940, therefore has no heir apparent. According to Omani officials, succession
would be decided by a “Ruling Family Council” of his relatively small Al Said family (about 50
male members). A reported front-runner as successor is Minister of Heritage and Culture Sayyid
Haythim bin Tariq Al Said, although some assess him as indecisive and often absent from his
post. In part to have an effective governing structure in place should Qaboos leave the scene
suddenly, some are pressing Qaboos to name a prime minister (Qaboos himself holds this
position). Some observers mentions the secretary general of the Foreign Ministry, Sayyid Badr
bin Harib Al Busaidi, as a possibility for such a post; he is said to be efficient and effective.2
Despite the three-decade-long opening of the political process discussed below, in recent years
some Omanis, particularly younger, well-educated professionals, have come to consider 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 even to wear spectacles, for example.
Among those who have been critical of the pace of political liberalization, some Omanis
(including some within the government) note 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.3 However, evidence that the pace of change has been perceived as slow was demonstrated
in 2011 in the form of protest in several cities, following unrest sweeping other parts of the
region. In Oman, two protesters were killed by security forces in the course of the
demonstrations.
Representative Institutions and Election History
Prior to the 2011 unrest, many Omanis and international observers had praised Sultan Qaboos for
creating legislative institutions and an election process long before there was any evident public
pressure to do so, even though the process 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 Sultan appoints the Consultative Council president from among the membership,
and the Consultative Council chooses two vice presidents. The State Council, which had 53
members at inception, has 83 appointed members as of 2012. Many of the appointees tend to be
former high-ranking government or military officials, such as ex-ambassadors.
The Oman Council’s scope of authority has long been constrained. When it was created, it was
not given power to draft legislation, lacked binding power to overturn the Sultan’s decrees or
government regulations, and was generally confined to economic and social issues. Within the
Oman Council, the State Council serves 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. Prior to the outbreak of unrest in Oman in 2011, some Omanis were saying in interviews
that the Oman Council’s influence over policy had not increased over time—and many experts
2 Author conversation with Omani Foreign Ministry consultant and unofficial envoy. May 5, 2011. This official has a
name nearly identical to that of the Minister of State for Defense, but they are two different officials.
3 Slackman, Michael. “With Murmurs of Change, Sultan Tightens His Grip.” New York Times, May 15, 2009.
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assessed that Oman had begun to substantially lag several other Gulf states on political
liberalization. As in the other Gulf states, formal political parties are not allowed. Unlike Bahrain
or Kuwait, there are not well-defined “political societies” (de-facto parties) in Oman that compete
within or outside the electoral process.
Electoral History
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).
In the October 27, 2007, election (after changing to a four-year term), Qaboos allowed 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.
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 2011 that many Omanis are dissatisfied with the pace of political
change. About two weeks after Egyptian protests toppled President Hosni Mubarak in February
2011, protests broke out in the northern industrial town of Sohar, Oman. On February 27, 2011,
several hundred demonstrators gathered there demanding better pay and more job opportunities;
one was 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 2011,
including establishment of an encampment in Sohar’s main square.
By the end of March 2011, Qaboos appeared to have calmed much of the unrest through a series
of measures. 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 latter appointments, several members of the elected
Consultative Council were appointed ministers. 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
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noted below, 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.
Protests abated by April 1, 2011, but did not end totally, and tensions remained high. One
demonstrator was killed in a demonstration in Sohar on April 1, 2011. On April 7, 2011, 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 April 8, 2011, but a heavy security
presence prevented fresh protests. During late April until mid-May, 2011, protests, some said to
be large, were held after each Friday prayers in the city of Salalah. Salalah is the capital of the
Dhofar region, which was in rebellion against the Omani central government until the mid-1970s.
Protests have been relatively few, but not absent, since. Possibly as a signal that the government
is committed to ensuring economic well-being and to head off any revival of major protests, in
August 2011, the government announced plans to increase spending by 9% in 2012 to finance
construction projects and more jobs for nationals. A freeze on prices of certain goods, imposed
August 18, 2011, could also have been intended to dampen further unrest.
Still, some unrest continues. In December 2011, twenty two jailed protesters (out of 50 who had
been jailed for protesting) went on a hunger strike to protest sentences that they asserted were too
long for the offense committed. In January 2012, the government announced plans to boost its
expenditures by about 26% to provide for jobs, social security, and unemployment benefits—an
apparent further budgetary effort to head off any resurgence of unrest. Still, in July 2012, there
was a wave of oil sector strikes and further demonstrations in Sohar by recent graduates
protesting a lack of job opportunities. Some protesters expressed anger at what they said was a
waste of resources in Sultan Qaboos’ sending of 100 horses to the Diamond Jubilee celebration of
Britain’s Queen Elizabeth.
October 2011: Election Following The Bulk of the Unrest
The 2011 unrest affected the October 2011 Consultative Council elections. As part of his reaction
to early unrest, on March 13, 2011, Qaboos issued a decree granting the Oman Council legislative
and regulatory powers, with exact powers to be determined by a government-appointed
committee. This announcement raised the stakes for candidates and voters in the Consultative
Council elections and State Council appointments, because the next Oman Council would
presumably have more influence on policy than the previous ones. The election date was set as
October 15, 2011.
As of the filing deadline, a total of 1,330 candidates had announced their candidacies. This was a
70% increase from the number of candidates in the 2007 vote and suggests that the 2011 unrest
had increased political activism and attracted candidates inspired by the increase in the Oman
Council’s powers. A record 77 women filed candidacies, compared to the 21 that filed in the 2007
vote. The government did not permit outside election monitoring.
Of the 520,000 Omanis who registered to vote, about 300,000 voted—the turnout of about 60%
(about the same as in the 2007 election) appeared to refute those who felt that the citizenry would
shun the political process following the months of unrest. Hopes among many Omanis that at
least several women would win were dashed—only one was elected, a candidate from Seeb
(suburb of the capital, Muscat). Some reformists were heartened by the election victory of two
political activists—Salim bin Abdullah Al Oufi, and Talib Al Maamari, an academic. The
government hailed the turnout as evidence of its popularity and an endorsement of its handling of
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the 2011 protest movement. In the State Council appointments that followed the Consultative
Council elections, the Sultan appointed 15 women, bringing the total female participation in the
Oman Council to 16 out of 154 total seats—just over 10%.
On October 19, 2011, in line with the March 2011 decree (see above), the Sultan issued another
decree giving the Oman Council some legislative powers to include approving, rejecting, and
amending legislation, and the power to question ministers who head agencies that provide direct
citizen services. However, the expanded powers appear to fall short of what many observers
would consider those of a legislature.
U.S. Responses
The U.S. reaction to the 2011 unrest in Oman was muted, possibly because Oman is a key ally of
the United States and perhaps because the unrest appeared minor relative to the rest of the region.
No U.S. statements were issued about Oman’s responses to the unrest. On June 1, 2011, after the
unrest had begun, and after some government force had suppressed protests, then U.S.
Ambassador Richard Schmierer gave an interview to an Omani paper, saying: “This certainly has
been a fascinating time to serve in the Middle East. The entire region, including Oman, has
witnessed enormous change in an extremely brief period of time. Sultan Qaboos was quick to
recognize and respond to the needs of Omanis. The way in which he responded to the concerns of
the Omani people is a testament to his wise leadership.”4 At her confirmation hearings on July 18,
2012, Ambassador-Designate to Oman Greta Holz (subsequently confirmed) said “If confirmed, I
will encourage Oman, our friend and partner, to continue to respond to the hopes and aspirations
of its people.”
Broader Human Rights Issues
The government’s practices on numerous other issues affect popular sentiment in Oman. The
State Department human rights report for 2011 did not repeat the assertions of the reports in
previous years that “the government generally respect[s] the human rights of its citizens.” The
2011 report states that “The principal human rights problems were the inability of citizens to
change their government, limits on freedom of speech, and societal mores that discriminate
against women. The report adds that security force impunity was not a significant problem. Oman
has a human rights commission which is an “autonomous body” attached to the State Council; it
was set up in November 2008.
U.S. funds from the Middle East Partnership Initiative and the Near East Regional Democracy
account (both State Department accounts) have been used to fund civil society and political
process strengthening, judicial reform, election management, media independence, and women’s
empowerment. In 2011, Oman established a new scholarship program through which 500 Omanis
have enrolled in higher education in the United States.
4 http://oman.usembassy.gov/pr-06012011.html
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Freedom of Expression/Media
The State Dept. human rights report for 2011 states that the law provides for limited freedom of
speech and press, but the government generally restricts these rights in practice. 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 15% 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.
In September 2011, a lower court decision resulted in the one month closure of a prominent
newspaper, Az Zaman, and the jailing of two of its editors. The sentences were for allegedly
insulting the justice minister in articles about corruption and abuses in that ministry.
Labor Rights
Omani workers have the right to form unions and to strike. However, only one federation of trade
unions is allowed, and the calling of a strike requires an absolute majority of workers in an
enterprise. The labor laws permit collective bargaining and prohibit employers from firing or
penalizing workers for union activity. 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
freedom report for July-December 2010 noted “no change in the status of respect for religious
freedom by the government during the reporting period.” According to the report, “There were no
significant reports of societal abuses or discrimination based on religious affiliation, belief, or
practice [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 agrees in principle to allow Buddhists to hold meetings if they can
find a corporate sponsor. 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
Throughout his tenure, Sultan Qaboos has given major speeches on the equality of women and
their importance in national development, and they now constitute over 30% of the workforce.
The first woman of ministerial rank in Oman was appointed in March 2003, and since 2004, there
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have been several women of that rank. As of August 2012, there are two female ministers in the
29 member cabinet (minister of education, and minister of higher education). In April 2004,
Qaboos placed five women among the 29 appointees to the public prosecutors office. Oman’s
ambassadors to the United States and to the United Nations are women.
There were 14 women in the 2007-2011 State Council, appointed following the 2007 election, up
from nine in the 2003-2007 council. 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
cycles, and only one was elected in the election held on October 15, 2011.
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 report for 2010,
issued June 14, 2010, Oman’s “grade” remained at Tier 2—the level it was assigned in the 2009
report. The Tier 2 ranking was repeated in the trafficking report for 2011 (released June 27, 2011)
and the report for 2012 (released June 19, 2012). The 2009-2012 rankings were based on an
assessment that Oman is making significant efforts to comply with minimum standards for the
elimination of trafficking and on 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.
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 it 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. Some U.S. Air Force
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equipment, including lethal munitions, is stored at these bases.5 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).6
In conjunction with the 2010 renewal, 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. One
complication could be the fact that, according to observers, about 200 British military personnel
were moving to Musnanah from Seeb,7 and it was unclear whether the facility can accommodate
both U.S. and British personnel. However, some of the issues were apparently cleared up because
the DOD authorization act for FY2011 (P.L. 111-383, signed January 7, 2011) authorized $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 2010.8
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. military presence in Oman fell to 3,750
during OIF because facilities in Gulf states closer to were used more extensively for OIF. Since
2004, there have been small numbers (less than 50) of U.S. military personnel in Oman (almost
all Air Force)9 – and below the pre-OEF figure of about 200 U.S. personnel. Since that same time
frame (post-2004), Omani facilities reportedly have not been used for air support operations in
either Afghanistan or Iraq. Unlike Bahrain or UAE, Oman has not contributed personnel to
training or military missions in Afghanistan.
Even though the U.S. military presence in Oman has shrunk dramatically over the past decade,
some Omani officials may want to reduce its visibility further. That view could reflect an Omani
calculation that the U.S. military presence angers Islamist Omanis, Iran, and members of anti-
U.S. terrorist organizations that may operate throughout the Gulf. Some Omani officials
reportedly have discussed with their U.S. counterparts the possibility of relocating U.S. personnel
to Masirah Island, which is one of the locations covered under the Access Agreement but which is
offshore and sparsely inhabited. On the other hand, Masirah’s runway is shorter than that of
Thumrait, the main location used by the U.S. Air Force, and some U.S. military officials consider
Masirah therefore less suitable. As of May 2012, there has not been any announced relocation of
U.S. personnel to Masirah.
5 Hajjar, Sami. U.S. Military Presence in the Gulf: Challenges and Prospects. U.S. Army War College, Strategic
Studies Institute. P. 27.
6 Finnegan, Philip. “Oman Seeks U.S. Base Upgrades.” Defense News, April 12, 1999.
7 Author conversation with Muscat Daily reporter about Musnanah. April 28, 2011.
8 Author conversation with State Department officer responsible for Oman. January 6, 2011.
9 Contingency Tracking System Deployment File, provided to CRS by the Department of Defense.
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U.S. Arms Sales and other Security Assistance to Oman10
Oman’s approximately 45,000-person armed force is the third largest of the Gulf Cooperation
Council states (GCC, including Saudi Arabia, Kuwait, UAE, Oman, Bahrain, and Qatar) and is
widely considered one of the best trained. However, it is not the best equipped. Using U.S.
assistance and national funds, Oman is trying to expand and modernize its arsenal primarily 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. British officers are
now mostly advisory. Much of its arsenal still is British-made, although it is increasingly
purchasing U.S. and not British systems.
Arms Purchases by Oman
Oman uses Foreign Military Financing (FMF) and national funds to modernize its forces. In
October 2001, after years of consideration and overtures from competing arms manufacturing
nations, 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, which said in May 2011 that it hoped to have a
firm contract in place with Oman by early 2012.11 Oman signed a contract with
Lockheed Martin for 12 of the aircraft in December 2011, with a contract for an
additional six still possible.
• 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 Martin under a June 2009 commercial
contract. The prime manufacturer of the countermeasures equipment is Northrop
Grumman.
• On October 19, 2011, DSCA notified Congress of a potential sale to Oman of
AVENGER fire units, Stinger missiles, and Advanced Medium Range Air to Air
Missiles (AMRAAMs)—all of which are to help Oman develop a layered air
10 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.
11 Andrea Shalal-Esa. “Lockheed Hopes to Finalize F-16 Sales to Iraq, Oman.” Reuters, May 16, 2011.
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defense system. The total value of the potential sale, including associated
equipment and training, is about $1.25 billion.
• On June 13, 2012, DSCA notified a sale of various types of AIM “Sidewinder”
air-to-air missiles to modernize Oman’s F-16 fleet and enhance its
interoperability with U.S. forces.
Other Uses for Foreign Military Financing (FMF)
FMF has been used to help Oman purchase several other types of equipment that help Oman
secure its borders, operate alongside U.S. forces, and combat terrorism. FMF, recent amounts of
which are shown in the table below, has helped Oman buy U.S.-made coastal patrol boats (“Mark
V”) for anti-narcotics, anti-smuggling, and anti-piracy missions, as well as aircraft munitions,
night-vision goggles, upgrades to coastal surveillance systems, communications equipment, and
de-mining equipment.
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, but Oman is
believed to still 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.
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.
IMET Program
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. In FY2011, DOD funds (“Section 1206” funds) were used to help Oman’s military
develop its counterterrorism capability through deployment of biometric data collection devices.
A small portion of the FY2012 funds ($48,000) are being used to give a human rights seminar to
unit commanders and key staff of Oman’s military.
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Table 2. Recent U.S. Aid to Oman
(In millions of dollars)
FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012
FY2013
IMET 0.75 0.83 1.14 1.14 1.11 1.43 1.45 1.525 1.622 1.65 2.05
FMF 80.0 24.85 19.84 13.86 13.49 4.712 7.0 8.85
13.0
8.0
8.0
NADR
.40
0.554
0.4
1.28
1.593
0.95
1.655
1.5
1.5
1.0
1206
0.948
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). Numbers for FY2011
reflect final allocations by State Dept.
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 2011,
released July 31, 2012, was actively involved in preventing terrorists from conducting attacks and
using the country for safe haven or transport. The previous year’s State Department report
credited Oman with transparency regarding its anti-money laundering and counterterrorist
financing enforcement efforts, and with steady improvement in its legal system related to those
efforts. That State Department report for 2009 credited 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. 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. In 2011, Oman bought biometrics and other equipment to
better secure its borders and coastline, particularly at night. And, it cooperates with State
Department programs (Export Control and Related Border Security, EXBS) on developing and
implementing comprehensive strategic export controls.
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Cooperation on Regional Issues
Sultan Qaboos has sometimes pursued foreign policies outside an Arab or Gulf consensus,
although Oman is an integral part of the Gulf Cooperation Council (GCC). Some of Oman’s
stances, such as its consistent engagement with Iran, have appeared at odds with both GCC and
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 point of alienating other Arab leaders. Oman has
generally been a skeptic of some GCC plans for greater economic and political coordination; it
balked at a Gulf state plan to form a monetary union and, as discussed below, opposes a Saudi
plan for GCC political unity.
Iran
Of the Gulf states, Oman is perceived as politically closest to and the least critical of Iran. Sultan
Qaboos has long maintained that there is no inconsistency between Oman’s alliance with the
United States and its friendship with Iran. Not only have successive Administrations refrained
from criticizing the Omani position, but this Oman-Iran 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. A 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 subsequently negotiated 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. They were released on September 21, 2011,
flying from Iran to Oman on their way back to the United States. It was subsequently reported
that a State Department official on Iran affairs had coordinated with Oman and with Switzerland
(which represents U.S. interests in Iran) to achieve their release.12
Some accounts say that Oman, over the past three years, Oman has drawn closer to Iran than it
has previously—even as the United States and its partners have greatly increased sanctions
against Iran over its nuclear program. 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.
On August 4, 2010, it signed a security pact with Iran, which reportedly commits the two to hold
joint military exercises. 13 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. The two
12 Dennis Hevesi. “Philo Dibble, Diplomat and Iran Expert, Dies At 60.” New York Times, October 13, 2011.
13 Iran, Oman Ink Agreement of Defensive Cooperation. Tehran Fars News Agency, August 4, 2010.
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countries have held one joint exercise under the pact, according to U.S. Ambassador to Oman
Holz. Oman has long publicly opposed any U.S. attack on Iran’s nuclear facilities.
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.14 Iran and Oman have discussed 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.
Such a joint project, if implemented, could potentially constitute a violation of the Iran Sanctions
Act, as amended. (See CRS Report RS20871, Iran Sanctions, for a discussion of the act and its
provisions). However, the United States has not publicly raised this issue, or otherwise accused
Oman of any violations or noncooperation with international sanctions against Iran. Ambassador
Holz, at her confirmation hearings on July 18, 2012, said that Oman is “compliant and supportive
of the international sanctions on Iran.”
Experts try to explain why Oman is 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.
At times, Oman’s attempts to steer a middle ground between Iran and the United States have
caused problems for Oman. For example, in April 1980, 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 1979.15 Oman complained to the
United States about the lack of prior notification of the mission.
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. Oman opened an embassy in post-Saddam Iraq but then closed it for
several years following a shooting outside it in November 2005. The embassy reopened in 2007
but Oman’s Ambassador to Iraq is non-resident. The Ambassador, appointed in March 2012,
serves concurrently as Oman’s Ambassador to Jordan and is resident there. The shooting
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.
14 Ibid.
15 CRS conversations with U.S. Embassy officials in Oman. 1995-2003.
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Afghanistan
As noted above, Oman has not sent forces or trainers to Afghanistan, although its facilities have
been used by U.S. forces to support operations there. Still, Oman has been engaged on the issue—
on February 24, 2011, Oman hosted then 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 Mullen’s chief Pakistani counterpart, Chief of Army Staff General Ashfaq Kayani.16
Arab-Israeli Issues
On the Arab-Israeli dispute, in a stand considered highly supportive of U.S. policy, Oman was the
one of the few Arab countries not to break relations with Egypt after the signing of the Egyptian-
Israeli peace treaty in 1979. All the GCC states participated in the multilateral peace talks
established by the 1991 U.S.-sponsored Madrid peace process, but only Oman, Bahrain, and
Qatar hosted working group sessions of the multilaterals. Oman hosted an April 1994 session of
the working group on water and, as a result of those talks, a Middle East Desalination Research
Center was established in Oman. Participants in the Desalination Center include Israel, the
Palestinian Authority, the United States, Japan, Jordan, the Netherlands, South Korea, and Qatar.
In September 1994, Oman and the other GCC states renounced the secondary and tertiary Arab
boycott of Israel. In December 1994, it became the first Gulf state to officially host a visit by an
Israeli Prime Minister (Yitzhak Rabin), and it hosted then Prime Minister Shimon Peres in April
1996. In October 1995, Oman exchanged trade offices with Israel, essentially renouncing the
primary boycott of Israel. However, there was no move to establish diplomatic relations. The
trade offices closed following the September 2000 Palestinian uprising.
Oman has expressed an openness to renewing trade ties with Israel if there is progress on Israeli-
Palestinian issues. In an April 2008 meeting in Qatar, Omani Foreign Affairs Minister Yusuf bin
Alawi bin Abdullah informed then Israeli Foreign Minister Tzipi Livni that the Israeli trade office
in Oman would remain closed until agreement was reached on a Palestinian state, although the
meeting itself represented a level of diplomatic outreach by Oman to Israel. There was little
follow-up thereafter and Oman, like many other Arab states, considers Israeli Prime Minister
Benjamin Netanyahu opposed to a settlement that would be acceptable to the Palestinians.
Nevertheless, 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; this suggests that Oman does not forswear all contact
with Israel.17 Oman reiterated its offer to resume trade contacts with Israel if Israel agrees to at
least a temporary halt in Israeli settlement construction in the West Bank. Israel did suspend such
activity but that suspension was lifted in September 2010; Israel and Oman have not resumed
trade office exchanges. Oman supports the Palestinian Authority drive for U.N. recognition.
16 “Mullen, Mattis Meet With Omani Counterparts.” American Forces Press Service. February 24, 2011.
17 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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Yemen
Oman’s relations with neighboring Yemen have traditionally been troubled, giving Oman a
significant stake in political stabilization there. 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, an advocate of separatism in south Yemen.
Oman has closely watched the popular uprising in Yemen out of concern that violence might
increase and destabilize the southern Arabian peninsula. In 2011, Oman built some refugee camps
near its border with Yemen to accommodate possible refugees who might flee an escalation of
violence there. As part of the GCC, Oman backed the GCC efforts to negotiate a peaceful
transition from the rule of Ali Abdullah Saleh, who returned to Yemen in late September 2011
following recuperation in Saudi Arabia following an attack on him in June 2011. Saleh agreed in
December 2011 to give up power and he departed Yemen in January 2012 line with the GCC
plan. However, stability has not returned, and Al Qaeda-linked groups have reportedly taken
advantage of the turmoil to increase their influence in parts of Yemen. According to the State
Department FY2013 foreign aid budget justification, this has caused Oman to redeploy assets to
better secure its border with Yemen, in the process thinning out Oman’s capabilities elsewhere.
Other GCC and Regional Issues: Bahrain, Libya, and Syria
Oman, as did the other members of the GCC, fully backs 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, as well as Kuwaiti naval units. No Omani forces were
deployed. The GCC forces were withdrawn in June 2011 after Bahrain lifted the state of
emergency that had been imposed in March 2011. 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.
In order to ensure that Shiite factions do not take power in Bahrain, at a GCC leadership meeting
on May 14, 2012, Saudi Arabia advanced a plan for political unity among the GCC states. A unity
agreement would presumably give Saudi Arabia greater justification to intervene again in Bahrain
on the Bahrain royal family’s behalf. However, the plan was not adopted due to concerns among
the other GCC leaders about surrendering some of their sovereignty. Observers say that Oman
was perhaps the most vociferous opponent of the Saudi plan.18
Oman did not appear to have played as active a role in supporting the Libya uprising as its fellow
GCC states Qatar and UAE. According to a wide range of accounts, Oman did not supply
18 Comments to the author by a visiting GCC official. May 2012.
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weapons or advice to rebel forces, as Qatar and UAE did to varying degrees. Oman recognized
the opposition Transitional National Council as the legitimate government of Libya only after
Tripoli fell to the rebellion on August 21, 2011.
Oman is part of the Arab League. It backed an Arab League plan to try to broker a resolution of
the unrest in Syria, including the December 2011 deployment of Arab League monitors that
would facilitate a withdrawal of the Syrian military from civilian neighborhoods. In November
2011, Oman voted to suspend Syria’s membership in the Arab League. In 2012, in concert with
the other GCC states, Oman has closed its embassy in Damascus. Some GCC states are widely
reported to be arming Syria’s opposition but it is believed that Qatar, Saudi Arabia, and UAE are
taking the lead on that initiative, with little if any Omani participation.
Border Disputes with UAE
Border disputes and political differences between Oman and the United Arab Emirates (UAE)
have sometimes flared. The two countries finalized their borders only in 2008, nearly a decade
after a tentative border settlement in 1999. In January 2011, Oman arrested several UAE citizens
that it said were spying on Oman. That came a few months after the UAE arrested about 25
Omanis on similar accusations. Some observers believe the two may indeed be spying on each
other because of their differing views on Iran; the UAE is more suspicious of Iran than is Oman.
Economic and Trade Issues19
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.20 Still, relatively high oil prices in 2011 helped Oman’s GDP
grew about 3.5% for that year.
The United States is Oman’s fourth-largest trading partner, and there was over $3.6 billion in
bilateral trade in 2011, nearly double the $1.87 billion in 2010. In 2011, the United States
exported $1.434 billion in goods to Oman, and imported $2.2 billion from Oman. Of U.S. exports
to Oman, the largest product categories were automobiles, aircraft and related parts, and drilling
and other oilfield equipment. Of the imports, $1.65 billion (about 75% of all U.S. imports from
Oman that year) was crude oil.
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,”
19 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.
20 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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under which Qatar is exporting natural gas to UAE and Oman through undersea pipelines; it
began operations in 2007. The natural gas supplies to Oman from Dolphin free up other Omani
natural gas supplies for sale to its customers. The need to diversify may have gained further
urgency in August 2011 when Reliance Energy Ltd. of India abandoned plans to develop an
offshore oil block six years after signing a production sharing agreement with the government.
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).
According to the U.S. embassy in Muscat, the FTA has led to increased partnerships between
Omani and U.S. companies. General Cables and Dura-Line Middle East are two successful
examples of joint ventures between American and Omani firms. Notably, these two new ventures
are not focused on hydrocarbons, which serves to show that the U.S.-Omani trade relationship is
varied and not focused only on oil.
Economic Aid
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.
Author Contact Information
Kenneth Katzman
Specialist in Middle Eastern Affairs
kkatzman@crs.loc.gov, 7-7612
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