Oman: Politics, Security, and U.S. Policy

Oman: Politics, Security, and U.S. Policy
June 17, 2020
The Sultanate of Oman has been a strategic partner of the United States since 1980, when it
became the first Persian Gulf state to sign a formal accord permitting the U.S. military to use its
Kenneth Katzman
facilities. Oman has hosted U.S. forces during every U.S. military operation in the region since
Specialist in Middle
then, and it is a partner in U.S. efforts to counter terrorist groups and other regional threats. In
Eastern Affairs
January 2020, Oman’s longtime leader, Sultan Qaboos bin Sa’id Al Said, passed away and was

succeeded by Haythim bin Tariq Al Said, a cousin selected by Oman’s royal family immediately
upon Qaboos’s death. Sultan Haythim espouses policies similar to those of Qaboos and has not

altered U.S.-Oman ties or Oman’s regional policies.
During Qaboos’s reign (1970-2020), Oman generally avoided joining other countries in the Gulf Cooperation Council (GCC:
Saudi Arabia, Kuwait, United Arab Emirates, Bahrain, Qatar, and Oman) in regional military interventions, instead seeking
to mediate their resolution. Oman joined but did not contribute forces to the U.S.-led coalition against the Islamic State
organization, nor did it arm groups fighting Syrian President Bashar Al Asad’s regime. It opposed the June 2017 Saudi/UAE-
led isolation of Qatar and has urged resolution of that rift.
Oman’s leaders have consistently asserted that engaging Iran is preferable to confrontation. Oman’s ties to Iran have enabled
it to broker agreements between the United States and Iran for the release of U.S. citizens held by Iran as well as U.S.-Iran
direct talks that later produced the July 14, 2015, Iran nuclear agreement (Joint Comprehensive Plan of Action, JCPOA). At
the same time, U.S. officials credit Oman with enforcing re-imposed U.S. sanctions and with taking steps to block Iran’s
efforts to ship weapons across Oman’s borders to Iran-backed Houthi rebels in Yemen.
During his reign, Sultan Qaboos drew consistent U.S. praise for gradually opening the political process in the absence of
evident public pressure to do so, and for promoting the role of women in society. The liberalization allowed Omanis a
measure of representation through elections for the lower house of a legislative body, but did not significantly limit the
Sultan’s role as paramount decisionmaker. Public clamor for faster and more extensive political reform, and resentment of
inadequate employment opportunities, produced protests in several Omani cities for much of 2011, and for two weeks in
January 2018, but government commitments to create jobs apparently helped calm unrest in each instance. Oman has
increased press censorship and arrested some critics who use social media, as have the other GCC states since the 2011 Arab
uprisings.
The periodic unrest may demonstrate that Oman is having difficulty coping with the decline in the price of crude oil since
mid-2014. Oman is assessed by international economic observers as particularly economically vulnerable to the economic
effects of the COVID-19 pandemic, which caused a further dip in oil prices as well as an interruption of tourism and other
sources of government revenue. As of June 10, 2020, Oman has reported about 19,000 COVID-19 cases and 84 deaths from
the disease. Oman’s economy and workforce has always been somewhat more diversified than some of the other GCC states,
as Oman has only modest energy resources. The country has sought to attract foreign investment, including to fund the
development of Al Duqm port, which Oman and several partner countries are building into what Oman hopes will be a major
trading hub. The 2006 U.S.-Oman free trade agreement (FTA) was intended to facilitate Oman’s access to the large U.S.
economy and accelerate Oman’s efforts to diversify. Oman receives small amounts of U.S. security assistance focused
primarily on building capacity of Oman’s counterterrorism and border and maritime security authorities.

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Contents
Historical Background and U.S. Relations........................................................................... 1
Democratization, Human Rights, and Unrest ....................................................................... 3
Representative Institutions, Election History, and Unrest ................................................. 4
Unrest Casts Doubt on Satisfaction with Pace of Political Reform................................ 5
Recent Elections .................................................................................................. 5

Broader Human Rights Issues...................................................................................... 6
Freedom of Expression, Media, and Association ....................................................... 6
Trafficking in Persons and Labor Rights .................................................................. 7
Religious Freedom ............................................................................................... 7
Advancement of Women ....................................................................................... 8
Foreign Policy/Regional Issues ......................................................................................... 8
Iran .................................................................................................................... 9
Cooperation against the Islamic State Organization (ISIS) and on Syria and Iraq .......... 11
Israeli-Palestinian Dispute and Related Issues ......................................................... 12
Defense and Security Issues............................................................................................ 13
Oman’s Defense Relations with other Militaries ........................................................... 14
U.S. Arms Sales and Other Security Assistance to Oman ............................................... 14
Cooperation against Terrorism and Terrorism Financing ................................................ 16
Anti-Money Laundering and Countering Terrorism Financing (AML/CFT) ................. 17
Countering Violent Extremism ............................................................................. 17
Economic and Trade Issues............................................................................................. 17
U.S.-Oman Economic Relations ........................................................................... 18

Figures
Figure 1. Oman............................................................................................................... 2
Figure 2. The new Sultan Haythim bin Tariq Al Said ............................................................ 4

Tables
Table 1. Recent U.S. Aid to Oman ................................................................................... 16

Contacts
Author Information ....................................................................................................... 18

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Oman: Politics, Security, and U.S. Policy

Historical Background and U.S. Relations
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 expel ing the Portuguese in 1650. The Al Said monarchy began in 1744, extending Omani
influence into Zanzibar and other parts of East Africa until 1861. Sultan Qaboos bin Sa’id Al Said
was the eighth in the line of the monarchy; he became sultan in July 1970 when, with British
military and political support, he compel ed his father, Sultan Said bin Taymur Al Said, to
abdicate. During his father’s reign, Omanis needed the sultan’s approval even to wear spectacles
or to import cement. Upon Qaboos’s death, Haythim bin Tariq Al Said, a cousin of Qaboos,
became the ninth Al Said monarch on January 11, 2020.
The United States has had relations with Oman since the early days of American independence.
The U.S. merchant ship Rambler made a port visit to Muscat in September 1790. The United
States signed a Treaty of Amity and Commerce 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, DC, in 1973. Sultan Qaboos was accorded formal state visits
in 1974, by President Gerald Ford, and in 1983, by President Ronald Reagan. President Bil
Clinton visited Oman in March 2000. Career diplomat Leslie Tsou took up her duties as
Ambassador on January 10, 2020.
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Figure 1. Oman

People
 Population: 3.6 mil ion, of which about 43% are expatriates
 Religions: Muslim (of which Ibadhis and Sunnis are over 90%, and 5% are Shia) 86%; Christian
6.5%; Hindu 5.5%; Buddhist 0.8%
Economy  GDP purchasing power parity (PPP): $190 bil ion
 GDP per capita (PPP): $46,000
 GDP real growth rate: -0.5% (2019): expected 3.5% contraction for al of 2020
 Inflation Rate: 1% (2020)
 Unemployment Rate: 18%
 Foreign Exchange/Gold Reserves: $16.7 bil ion (2020)
 External Debt: $20.5 bil ion
Energy
 Oil Production: 860,000 barrels per day; Reserves: 5 bil ion-5.5 bil ion barrels; Exports: 750,000
barrels per day (bpd)
 Natural Gas Production: 875 bil ion cubic feet per year; Reserves: 30 tril ion cubic feet; Exports: 407
bil ion cubic feet per year
 Energy Sector Structure: Petroleum Development Oman (PDO)—a partnership between the
Omani government (60%), Royal Dutch Shel , Total, and Partx (2%) controls most oil and natural
gas resources
Trade
 Major Partners: China (mostly oil), UAE, South Korea, Japan, India, United States, Saudi Arabia
Source: Graphic created by CRS with information from CIA, The World Factbook. World Bank: Oman's Economic
Update — April 2020; State Department report on international religious freedom for 2019: Oman.


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Democratization, Human Rights, and Unrest
Oman remains a monarchy in which decision-making has been concentrated with the Sultan. The
government, and Omani society, reflects the diverse backgrounds of the Omani population, many
of whom have long-standing family connections to parts of East Africa that Oman once
controlled, and to the Indian subcontinent.
Along with political reform issues, the question of succession has long been central to observers
of Oman. Qaboos’s brief marriage in the 1970s produced no children, and the Sultan, who was
born in November 1940, had no heir apparent when he passed away on January 11, 2020, after a
long il ness. According to Omani officials, succession would be decided by a “Ruling Family
Council” of his relatively smal Al Said family (about 50 male members) and, if the family
council could reach agreement within three days, it was to select the successor recommended by
Qaboos in a sealed letter to be opened upon his death.1 Upon his death, the Family Council and a
separate Defense Council, in a televised ceremony, opened Qaboos’s letter and named his choice,
Haythim bin Tariq Al Said, as the new Sultan.
Haythim, an Oxford-educated cousin of Qaboos, is about 65 years of age (born October 13,
1954). He had served since 2002 as Minister of Heritage and Culture and previously served in
senior positions in Oman’s foreign ministry. Haythim’s selection bypassed his two older
brothers—Asad bin Tariq and Shihab bin Tariq—who many experts considered were more likely
successors than Haythim. Upon assuming the leadership, Sultan Haythim indicated a commitment
to continue Qaboos’s policies.2

1 “Explainer: How Oman’s succession works to determine the next Sultan .” Al Arabiya, January 11, 2020.
2 “Meet Oman’s New Sultan. How Will He Navigate the Region’s T urmoil?” Washington Post, January 15, 2020.
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Figure 2. The new Sultan Haythim bin Tariq Al Said

Source: Times of Oman.
Representative Institutions, Election History, and Unrest
Many Omanis, U.S. officials, and international observers credited Sultan Qaboos for establishing
consultative institutions and electoral processes before there was evident public pressure to do so.
Under a 1996 “Basic Law,” Qaboos created a bicameral “legislature” cal ed the Oman Council,
consisting of the existing Consultative Council (Majlis As Shura) and an appointed State Council
(Majlis Ad Dawla).3 The Consultative Council was formed in 1991 to replace a 10-year-old al -
appointed advisory council. A March 2011 decree expanded the Oman Council’s powers to
include questioning ministers, selecting its own leadership, and reviewing government-drafted
legislation, but it stil does not have the power to draft legislation or to overturn the Sultan’s
decrees or government regulations. As in the other GCC states, formal political parties are not

3 Basic Law of the Sultanate of Oman. November 6, 1996.
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al owed but, unlike Bahrain or Kuwait, wel -defined “political societies” (de-facto parties) have
not developed in Oman. In 2011, Qaboos instituted elections for municipal councils.
Elected Consultative Council. The size, scope of authority, and the electorate for Oman’s elected
legislature have gradual y expanded. When it was formed in 1991, the Consultative Council had
59 seats, and it has been gradual y expanded since to its current size of 86 seats. In the 1994 and
1997 selection cycles for the council, “notables” in each of Oman’s districts nominated three
persons and Qaboos selected one of them to occupy that district’s seat. The first direct elections
were held in September 2000; holders of a high school or university degree, businessmen, and
notables could vote – an electorate of about 25% of the population over 21 years of age. For the
October 4, 2003, election, voting rights were extended to al citizens, male and female, over 21
years of age. Prior to 2011, the Sultan selected the Consultative Council chairman; since then, the
chairman and a deputy chairman have been elected by the Council membership. The more recent
Consultative Council elections are discussed below.
The State Council remains an al -appointed body, and arguably acts as a counterweight to the
Consultative Council by being able to block legislative initiatives of the Consultative Council. Its
size has expanded from 53 members at inception to 86 members – equal to the Consultative
Council. Appointees are usual y former high-ranking government officials, military officials,
tribal leaders, and other notables.4
Unrest Casts Doubt on Satisfaction with Pace of Political Reform
Despite the gradual reforms, prominent Omanis petitioned Sultan Qaboos in 2010 for a
“contractual constitution” that would provide for a fully elected legislature. In February 2011,
after pro-democracy protests broke out in several Arab countries, protests broke out in Oman as
wel . Many protesters cal ed for more job opportunities whereas others cal ed for a fully-elected
legislature, but there were no evident cal s for the Sultan to resign. The government calmed the
unrest— which spanned most of 2011—through a combination of reforms and punishments,
including expanding the powers of the Oman Council and creating additional public sector jobs.
The journalists, bloggers, and other activists that were arrested during the unrest for “defaming
the Sultan,” “il egal gathering,” or violating the country’s cyber laws were pardoned and those
who were dismissed from public and private sector jobs for participating in unrest were
reinstated.5
Smal demonstrations occurred again for two weeks in January 2018. Protesters general y cited
what they describe as a lack of job opportunities rather than demanding political reform. In
response, the government reiterated an October 2017 plan to create 25,000 jobs for Omani
citizens and banned the issuance of new visas for expatriate workers in 87 private sector
professions.
Recent Elections
The October 15, 2011, Consultative Council elections went forward amidst the unrest. Perhaps
because of the enhancement of the Oman Council’s powers, about 1,330 candidates applied to
run—a 70% increase from the 2007 vote. A record 77 candidates were women; one woman was
elected. Some reformists were heartened by the victory of two political activists, Salim bin
Abdullah Al Oufi, and Talib Al Maamari, and the selection of a relatively young entrepreneur as
speaker of the Consultative Council (Khalid al-Mawali). In the State Council appointments, the

4 “15 Women in New Omani State Council.” Al Sharq Al Awsat, November 8, 2019.
5 James Worrall. “Oman : T he “Forgotten ” Corner of the Arab Spring.” Middle East Policy. September 2012.
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Sultan appointed 15 women, bringing the total female participation in the Oman Council to 16—
over 10%.
In 2012, the government also initiated elections for 11 municipal councils, bodies that make
recommendations to the government on development projects, but do not make final funding
decisions. The chairman and deputy chairman of each municipal council are appointed by the
government. In the December 22, 2012 municipal elections, there were 192 seats up for election.
There were more than 1,600 candidates, including 48 women. About 546,000 citizens voted. Four
women were elected.
Another election to the Consultative Council was held on October 25, 2015. A total of 674
candidates applied to run, although 75 candidates were barred, apparently based on their
participation in the 2011 unrest. There were 20 women candidates. The one incumbent woman
was reelected but no other woman was elected.
On December 25, 2016, the second municipal elections were held to choose 202 councilors—an
expanded number from the 2012 municipal elections. There were 731 candidates, of whom 23
were women. Seven women were elected.
2019 Elections6
The most recent Consultative Council elections were held on October 27, 2019. On July 7, 2019,
the government issued a preliminary list of 767 candidates, including 43 women, but the final
approved list contained 637 candidates, of which 40 were women. There were 713,000 eligible
voters. Turnout was described as high, and two women won seats in the final results, which were
announced October 29, 2019. Khalid bin Hilal al-Mawali was elected to a third term as speaker of
the Consultative Council, and overal the Council appeared to represent continuity in Oman’s
political process rather than dramatic change. On November 8, 2019, Qaboos appointed the
members of the State Council, including 15 women.
Broader Human Rights Issues7
According to the most recent State Department report on human rights, the principal human rights
issues in Oman are: “al egations of torture of prisoners and detainees in government custody;
restrictions on free expression, the press, and the internet, including censorship, site blocking, and
criminal libel; substantial interference with the rights of peaceful assembly and freedom of
association; required exit permits for foreign workers; restrictions on political participation; and
criminalization of lesbian, gay, bisexual, transgender, and intersex (LGBTI) conduct.”
The law provides for an independent judiciary, but the Sultan chairs the country’s highest legal
body, the Supreme Judicial Council, which can review judicial decisions. The Oman Human
Rights Commission, a quasi-independent but government-sanctioned body, investigates and
monitors prison and detention center conditions through site visits.
Freedom of Expression, Media, and Association
Omani law provides for limited freedom of speech and press, but the State Department assesses
that the government general y does not respect these rights. In October 2015, Oman followed the

6 See “15 Women in New Omani State Council.” Op.cit.
7 Much of this section, including its subsections, is derived from the State Department’s country report on human rights
practices for 2019; on international religious freedom (2019) and on trafficking in persons (2019).
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lead of many of the other GCC states in issuing a decree prohibiting disseminating information
that targets “the prestige of the State’s authorities or aimed to weaken confidence in them.” The
government has prosecuted dissident bloggers and cyber-activists under that and other laws.8
Omani law provides for freedom of association for “legitimate objectives and in a proper
manner,” enabling the government to restrict such rights in practice. Associations must register
with the Ministry of Social Development.
Private ownership of radio and television stations is not prohibited, but there are few privately
owned stations. Satel ite dishes have made foreign broadcasts accessible to the public. Stil ,
according to the State Department report, there are some legal and practical restrictions to
Internet usage, and many Internet sites are blocked for content the government decides is
objectionable.
Trafficking in Persons and Labor Rights
According to the State Department Trafficking in Persons reports, Oman is a destination and
transit country for men and women primarily from South Asia and East Africa who are subjected
to forced labor and, to a lesser extent, sex trafficking. The 2019 and 2018 Trafficking in Persons
report rated Oman as Tier 2, based on the government’s investigating, prosecuting, and convicting
more suspected traffickers than in previous years and in standing up a specialized anti-trafficking
prosecutorial unit.9 The government also developed, funded, and began implementing a new five-
year national action plan to combat trafficking in persons.
On broad labor rights, Omani workers have the right to form unions and to strike (except in the
oil and gas industry). One government-backed federation of trade unions exists—the General
Federation of Oman Trade Unions. The cal ing 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 Freedom10
Oman has historical y had a high degree of religious tolerance, particularly compared to some of
the other GCC states such as Bahrain and Saudi Arabia. An estimated 45%-75% (government
figure) of Omanis adhere to the Ibadhi sect, a relatively moderate school of Islam centered mostly
in Oman, East Africa, and in parts of Algeria, Libya, and Tunisia.11 About 5% of Oman’s citizens
are Shia Muslims, and they are al owed to adjudicate family and personal status cases according
to Shia jurisprudence, outside the civil court system.
The State Department religious freedom report notes no known instances of societal abuses or
discrimination based on religious affiliation or practice. Non-Muslims, who are mostly
expatriates working in Oman, are free to worship at temples and churches built on land donated
by the government but, according to law, offending Islam or any Abrahamic religion is a criminal

8 “Omani authorities restrict free expression through censorship and arrests of activists.” Monitor: T racking Civic
Space, September 6, 2017.
9 Department of State, “Trafficking in Persons Report for 2019: Oman.”
10 State Department report on International Religious Freedom for 2019. Oman.
11 Whereas Ibadhi religious and political dogma generally resembles basic Sunni doctrine, Ibadhis are neith er Sunni nor
Shia. Ibadhis argue that religious leaders should be chosen by community leaders for their knowledge and piety,
without regard to race or lineage. A rebellion led by the Imam of Oman, leader of the Ibadhi sect, ended in 1959 .
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offense. In January 2018, a new penal code significantly increased penalties for blasphemy and
for promoting a religion other than Islam.
Al 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);
and the Hindu Mahajan Temple. Buddhists are able to worship in private spaces, but have not
been able to build separate places of worship. Members of al religions and sects are free to
maintain links with coreligionists abroad and travel outside Oman for religious purposes. MERA
has al owed construction of a new building for Orthodox Christians, with separate hal s for
Syrian, Coptic, and Greek Orthodox Christians, and it has approved worship space for Baptists. A
new Catholic church was inaugurated in Salalah in September 2019. The Church of Jesus Christ
of Latter Day Saints (Mormons) has not received approval to establish an independent place of
worship. There is no indigenous Jewish population, and private media have occasional y
published anti-Semitic editorial cartoons.
Advancement of Women
During his reign, Sultan Qaboos emphasized that Omani women are vital to national
development. Women now constitute over 30% of the workforce. The first woman of ministerial
rank in Oman was appointed in March 2003, and, since then, there have consistently been several
female ministers. Oman’s ambassadors to the United States and to the United Nations are women.
The number of women in Oman’s elected institutions was discussed above, but campaigns by
Omani women’s groups failed to establish a quota for women elected to the Consultative Council.
More broadly, Omani women continue to face social discrimination, often as a result of the
interpretation of Islamic law. Al egations of spousal abuse and domestic violence are fairly
common, with women finding protection primarily through their families rather than through
legal institutions.
Foreign Policy/Regional Issues
During Sultan Qaboos’s reign, Oman pursued a foreign policy that sometimes diverged from that
of some of Oman’s GCC partners, particularly Saudi Arabia. Sultan Haythim has said he wil
largely continue Qaboos’s foreign policy, in which Oman has general y sought to mediate
resolution of regional conflicts and refrained from direct military involvement in them. However,
some observers have speculated that Oman’s weak financial position and Haythim’s inexperience
in a leadership role could open Oman to pressure from Saudi Arabia and the UAE to support their
foreign policy initiatives.12
Oman joined the U.S.-led coalition against the Islamic State, but did not participate in the
coalition’s airstrikes or ground operations against the group. Oman did not join the Saudi-led
Arab coalition assembled in 2015 to fight the Iran-backed Houthi forces in Yemen and has instead
sought to mediate a resolution of that conflict. In 2013, Oman opposed a Saudi proposal for
political unity among the GCC states, even threatening to withdraw from the GCC if the plan was
adopted.13 Oman also opposed the Saudi-led move in June 2017 to isolate Qatar over a number of

12 Anne Sheline. “ Oman’s Smooth T ransition Doesn’t Mean Its Neighbors Won’t Stir Up T rouble.” Foreign Policy,
January 23, 2020.
13 “Omani rejection of GCC union adds insult to injury for Saudi Arabia.” Al Monitor, December 9, 2013.
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policy disagreements. Lingering border disputes also have plagued Oman-UAE relations; the two
finalized their borders in 2008, nearly a decade after a tentative border settlement in 1999.
Iran14
Omani leaders, including Sultan Haythim, have consistently asserted that engagement with Iran
better mitigates the potential threat from that country than confrontation—a stance that has
positioned Oman as a mediator in regional conflicts in which Iran or its proxies are involved. In
explaining Oman’s positive relations with Iran, Omani leaders often cite the Shah of Iran’s
support for Qaboos’s 1970 takeover and Iran’s deployment of troops to help Oman end the leftist
revolt in Oman’s Dhofar Province during 1962-1975, a conflict in which 700 Iranian soldiers
died.15
Sultan Qaboos demonstrated his commitment to relations with his visit to Tehran in August 2009,
at the time of massive Iranian protests over al eged fraud in the reelection of President Mahmoud
Ahmadinejad. He visited again in August 2013, after Iran’s President Hassan Rouhani took office.
Rouhani visited Oman in 2014 and 2017; the latter trip was part of an unsuccessful Iranian effort
to begin a political dialogue with the GCC. Oman was the only GCC state not to downgrade
relations with Iran in January 2016 in solidarity with Saudi Arabia when the Kingdom broke
relations with Iran in connection with the dispute over the Saudi execution of a dissident Shia
cleric. In 2009, Iran and Oman agreed to cooperate against smuggling across the Gulf of Oman.
In August 2010, Oman signed a pact with Iran to cooperate in patrolling the Strait of Hormuz, an
agreement that reportedly committed the two to hold joint military exercises. The two countries
expanded that agreement by signing a Memorandum of Understanding on military cooperation in
2013, and they have held some joint exercises under these agreements.16
Iran and Oman conduct significant volumes of civilian trade, but Oman has sought to ensure that
its projects with Iran would not violate any of the wide array of U.S. sanctions in effect on
transactions with Iran. Most notably, Oman has permitted Iran to invest in the expansion of
Oman’s port of Al Duqm, which Tehran might eventual y use as a hub for Tehran to interact with
the global economy. Oman and Iran are jointly developing a $200 mil ion car production plant
there.17 Iran and Oman have jointly developed the Hengham oilfield in the Persian Gulf,18 In
2014, the two countries signed a deal to build a $1 bil ion undersea pipeline to bring Iranian
natural gas from Iran’s Hormuzegan Province to Sohar in Oman, from where it would be
exported, but the reimposition of U.S. sanctions on Iran in 2018 appear to have derailed the
concept.19
Oman as a Go-Between for the United States and Iran
Oman’s relations with Iran have often helped U.S. officials negotiate with Iranian officials. U.S.
officials’ meetings with Iranian officials in Oman that began in early 2013 set the stage for

14 For information on Iran’s regional policies, see: CRS Report R44017, Iran’s Foreign and Defense Policies, by
Kenneth Katzman.
15 Faramarz Davar. “ Why is Oman So Loyal to Iran?” Iranwire, August 9, 2018.
16 Giorgio Cafiero and Adam Yefet. “Oman and the GCC: A Solid Relationship?” Middle East Policy, 2016.
17 “In post-oil economy, Oman turns sleepy fishing port to bustling trading hub,” National, February 7, 2017; “Car
Production Plan Back on Iran-Oman Agenda,” Financial Tribune, January 24, 2017.
18 “Hengam Gas Processing to Help Earn $300m Annually,” Financial Tribune, March 3, 2018.
19 Dana El Baltaji, “Oman Fights Saudi Bid for Gulf Hegemony with Iran Pipeline Plan,” Bloomberg, April 21, 2014;
“Oman to Invite Bids to Build Gas Pipeline,” Financial Tribune, April 23, 2018.
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negotiations that culminated in the Joint Comprehensive Plan of Action (JCPOA) Iran nuclear
agreement that was finalized in July 2015.20 Omani banks, including Bank Muscat that held about
$5.7 bil ion in Iranian funds, were used to implement some of the financial arrangements of the
JCPOA.21
Oman also has been an intermediary through which the United States and Iran have exchanged
captives. Oman brokered a U.S. hand-over of Iranians captured during U.S.-Iran skirmishes in the
Persian Gulf in 1987-1988. In 2007, Oman helped broker Iran’s release of 15 British sailors, who
Iran had captured in the Shatt al Arab waterway. U.S. State Department officials publicly
confirmed that Oman helped broker the 2010-2011 releases from Iran of three U.S. hikers (Sara
Shourd, Josh Fattal, and Shane Bauer), in part by paying their $500,000 per person bail to Iran.22
In April 2013, Omani mediation obtained the release to Iran of an Iranian scientist imprisoned in
the United States in 2011 for procuring nuclear equipment for Iran.
The Trump Administration has not criticized Oman’s relations with Iran, even though Omani
policy conflicts to some extent with U.S. efforts to isolate Iran. During a January 2019 regional
trip, Secretary of State Michael Pompeo praised Oman for enforcing the sanctions that the Trump
Administration has re-imposed on Iran.23 Since November 2016, Iran had been exporting heavy
water to Oman, helping Iran reduce its stockpile to a level that comports with its commitments
under the JCPOA. However, in May 2019, the United States ended waivers that enabled countries
to buy Iranian heavy water without U.S. penalty, a decision that caused Oman to stop importing
Iranian heavy water. In May 2019, Secretary Pompeo discussed escalating U.S.-Iran tensions with
Sultan Qaboos, suggesting that the United States sought Oman’s help to de-escalate tensions.24
However, it is not clear that any Omani mediation resulted from the conversation.
Oman, Iran, and Yemen25
In neighboring Yemen, Oman and Iran’s interests conflict, insofar as Iran is widely reported,
including by U.N. investigators, to be arming and advising the Zaidi Shia “Houthi” movement
that drove the Republic of Yemen government out of the capital, Sanaa, in 2014. Oman did not
join the Saudi-led Arab coalition fighting to restore the Yemen government and has instead sought
to use its ties to Iran to mediate the Yemen conflict. The U.N. Special Envoy for Yemen in 2018
described Oman as “playing a pivotal role in al our efforts to help people in Yemen.”26 Oman
hosted talks between U.S. diplomats and Houthi representatives, and brokered the Houthis’

20 David Ignatius. “Opinions: T he Omani ‘back channel’ to Iran and the secrecy surrounding the nuclear deal.”
Washington Post, June 7, 2016.
21 Omani banks had a waiver from U.S. sanctions laws to permit transferring those funds to Iran’s Central Bank, in
accordance with Section 1245(d)(5) of the National Defense Authorization Act for Fiscal Year 2012 ( P.L. 112-81). For
text of the waiver, see a June 17, 2015, letter from Assistant Secretary of State for Legislative Affairs Julia Frifield to
Senate Foreign Relations Committee Chairman Bob Corker, containing text of the “ determination of waiver.” See also:
Permanent Subcommittee on Investigations of the U.S. Senate. Majority Report. “Review of U.S. T reasury
Department’s License to Convert Iranian Assets Using the U.S. Financial System.” May 2018.
22 Dennis Hevesi. “Philo Dibble, Diplomat and Iran Expert, Dies at 60.” New York Times, October 13, 2011.
23 Department of State. Speech by Secretary of State Michael Pompeo. A Force for Good: America Reinvigorated in
the Middle East. January 10, 2019.
24 Department of State. Readout. Secretary Pompeo’s Call with Omani Sultan Qaboos bin Sa’id Al Sa’id. May 16,
2019.
25 For information, see: CRS Report R43960, Yemen: Civil War and Regional Intervention, by Jeremy M. Sharp.
26 Madiha Asif, “Oman playing key role in helping Yemeni citizens,” Times of Oman, April 8, 2018.
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release of several of their captives.27 Oman also has sought to prevent spil over of the Yemen
conflict into Oman by increasing patrols along the border with Yemen. The Oman government
also has built ties with tribes and residents just over the border, and it has provided some
humanitarian aid to the Yemeni people.28
In 2016, media reports indicated that Iran has used Omani territory to smuggle weapons into
Yemen, taking advantage of the porous and sparsely populated 179-mile border between the two
countries.29 Smuggled materiel al egedly included anti-ship missiles,30 surface-to-surface short-
range missiles, smal arms, and explosives. Some reports indicate that Iranian-made unmanned
aerial vehicles (UAVs) used by Houthi forces in Yemen may have transited through Oman.31 U.N.
reports from the Panel of Experts established pursuant to resolution 2140 (2014) identified land
routes that stretch from the Omani border to Houthi-controlled areas in the west and Omani ports
with road access to Yemen as possible channels for weapons smuggling.32 Omani officials denied
the al egations.”33 Since the March 2018 visit of then-Defense Secretary James Mattis to discuss
ways to secure the Oman-Yemen border, Omani officials asserted in 2018 that the “file” of Iran
smuggling weaponry to the Houthis via Omani territory was “closed,” suggesting that Oman has
stopped any such trafficking through it.34
The current instability adds to a long record of difficulty in Oman-Yemen relations. The former
People’s Democratic Republic of Yemen (PDRY), considered Marxist and pro-Soviet, supported
Oman’s Dhofar rebel ion (see above). Oman-PDRY relations were normalized in 1983, but the
two engaged in border clashes later in that decade. Relations improved after 1990, when PDRY
merged with North Yemen to form the Republic of Yemen.
Related U.S. Assistance Issues. The United States obligates Nonproliferation, Anti-Terrorism,
Demining and Related Programs (NADR) funds for counterterrorism programming, some of
which is used for the Oman Border Security Enhancement Program that is “focused on
developing and enhancing Omani border security capabilities along the Oman-Yemen border.”35
The FY2019 National Defense Authorization Act (NDAA, H.R. 5515, P.L. 115-232) extended the
authority to provide funds to Oman under Section 1226 of the FY2016 NDAA (22 U.S.C. 2151)
to secure the border with Yemen. U.S. assistance to Oman for counter-terrorism and border
security is discussed in greater detail below.
Cooperation against the Islamic State Organization (ISIS) and on Syria and
Iraq

Oman, along with the other GCC states, joined the U.S.-led Global Coalition to Defeat ISIS in
2014. Oman offered the use of its air bases for the coalition but, unlike several other GCC states,

27 Adam Goldman. “Marine Veteran, Held a Year by Yemeni Rebels, is Freed,” New York Times, November 7, 2016.
28 “Oman’s humanitarian aid to Yemen also pragmatic.” Al Monitor, January 9, 2020.
29 Yara Bayoumy and Phil Steward, “Exclusive: Iran steps up weapons supply to Yemen’s Houthis via Oman —
officials,” Reuters, October 20 2016.
30 “U.S. warship targeted in failed missile attack from Yemen: official,” Reuters, October 15, 2016.
31 “Iranian T echnology T ransfers to Yemen,” Conflict Armament Research, March 2017.
32 See, for example, S/2018/68, Final report of the Panel of Experts on Yemen, January 26, 2018.
33 “Oman denies arms smuggled through border to Houthis,” Middle East Eye, October 21, 2016.
34 Press Gaggle En Route to Oman, U.S. Department of Defense, March 10, 2018;” CRS conversations with Oman
Embassy in Washington, DC, June 2018.
35 State Department CN 18-090, transmitted May 3, 2018.
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Oman did not conduct airstrikes against the group. Oman also was not reported to have backed
any rebel groups fighting Iran’s close al y, Syrian President Bashar Al Asad, and instead focused
on mediating the Syria internal conflict. Oman joined other Arab states in 2011 in suspending
Syria’s membership in the Arab League, but Oman did not suspend its relations with the Syrian
government.36 In July 2019, Oman’s de-facto Foreign Minister Yusuf Alawi visited Damascus
reportedly to convey a U.S. message to Asad and to discuss regional stability.37
On Iraq, no GCC state undertook air strikes against the Islamic State fighters there. The GCC
states general y have not assisted the Shia-dominated government in post-Saddam Iraq. Oman
opened an embassy in Iraq after the 2003 ousting of Saddam but then closed it for several years
following a shooting outside it in November 2005 that wounded four, including an embassy
employee. The embassy reopened in 2007, and Oman provided $3 mil ion for Iraq’s stabilization
and reconstruction.38
Israeli-Palestinian Dispute and Related Issues
Oman was the one of the few Arab countries not to break relations with Egypt after the signing of
the U.S.-brokered Egyptian-Israeli peace treaty in 1979. The GCC states participated in the
multilateral peace talks established by the 1991 U.S.-sponsored Arab-Israeli peace process. As a
result of the multilateral working group sessions of that process, Oman hosts a Middle East
Desalination Research Center. In September 1994, Oman and the other GCC states renounced the
secondary and tertiary Arab boycott of Israel.39
In December 1994, Oman became the first Gulf state to official y 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, but diplomatic relations were not
established. The trade offices closed following the September 2000 Palestinian uprising and have
remained closed.40 On October 25, 2018, Israeli Prime Minister Binyamin Netanyahu visited
Oman and met with Sultan Qaboos to discuss regional issues, a visit widely seen as evidence of
improving ties between Israel and some of the GCC states. The visit was followed up by a
November 2018 visit to Oman by Israel’s Minister of Transportation and Minister of Intel igence
Yisrael Katz to present a concept for a railway between Israel, Jordan, and the Gulf states.41 On
July 2, 2019, an Israeli intel igence official stated at a public conference that Israel had
established a representative office in Oman. Israeli Foreign Ministry officials did not confirm or
deny that assertion.42
Oman publicly supports the Palestine Liberation Organization (PLO) in its diplomatic initiatives
and its claims of Palestinian statehood. In 2018, Oman’s Foreign Minister Alawi visited the Al
Aqsa Mosque in East Jerusalem, and he also met Palestinian officials in Ramal ah. In June 2019,
Oman announced plans to open an embassy to the Palestinians in the West Bank.43 The

36 T he growing strength of Russian-Omani ties. T he Middle East Institute, March 10. 2020.
37 Sigurd Neubauer. “Oman: the Gulf’s Go-Between” T he Arab Gulf States Institute in Washington. February 4, 2016;
“Omani foreign minister makes rare visit to Syria.” T he Washington Post, July 7 , 2019.
38 Senate Foreign Relations Committee. Iraq’s T ransition: the Way Ahead: Part I. May 18, 2004.
39 See: CRS Report RL33961, Arab League Boycott of Israel, by Martin A. Weiss.
40 See: CRS In Focus IF11237, Israel and the Palestinians: Chronology of a Two-State Solution, by Jim Zanotti.
41 “Israeli minister in Oman to attend transport conference.” Al Jazeera, November 7, 2018.
42 “Mossad Chief Declares Israel Renewing Oman T ies; Foreign Ministry Won’t Comment.” Times of Israel, July 2,
2019.
43 “Oman says to open embassy in Palestinian territories.” AFP, June 26, 2019.
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announcement coincided with the U.S.-led workshop in Bahrain intended to promote investment
in the region as part of a Middle East peace initiative. Neither Palestinian nor Omani officials
attended the workshop. Oman has publicly rejected Israel’s announced plans to annex parts of the
West Bank.44
Defense and Security Issues45
As threats to the region mounted after Iran’s 1979 revolution, Sultan Qaboos, a Sandhurst-
educated defense strategist, consistently asserted that the United States was the security guarantor
of the region. On April 21, 1980, Oman signed a “facilities access agreement” that al ows U.S.
forces access to Omani military facilities and, days later, U.S. forces used Oman’s Masirah Island
air base to launch the failed attempt to rescue the U.S. Embassy hostages in Iran. Under the
agreement, which the State Department fact sheet cited above says was revised and renewed in
2010, the United States reportedly has access to Oman’s military airfields in Muscat (the capital),
Thumrait, Masirah Island, and Musnanah. U.S. forces used these facilities for major combat
operations in Afghanistan (Operation Enduring Freedom, OEF) and, to a lesser extent, Iraq
(Operation Iraqi Freedom, OIF). Oman did not contribute forces either to OEF or OIF. After
2004, Omani facilities were not used for U.S. air operations in Afghanistan or Iraq.
Some U.S. Air Force equipment, including lethal munitions, is reportedly stored at these bases.46
According to February 2018 testimony of CENTCOM commander General Joseph Votel, each
year Omani military forces participate in several exercises, and Oman al ows 5,000 overflights
and 600 landings by U.S. military aircraft and hosts 80 port cal s by U.S. naval vessels.47 A few
hundred U.S. military personnel, mostly Air Force, are stationed in Oman.48
Omani leaders have expressed wil ingness to join a U.S.-backed “Middle East Strategic Al iance”
(MESA) among al six GCC states and other Sunni Arab states that would counter Iran. The
Trump Administration reportedly planned to formalize that coalition at a U.S.-GCC summit in the
United States, but the intra-GCC rift has repeatedly delayed a summit and the finalization of the
MESA. On January 9, 2019, Oman hosted meetings on the “economic and energy pil ars of the
Middle East Strategic Al iance,” according to the readout of Secretary Pompeo‘s meeting with
Qaboos on January 15, 2019.49
On March 24, 2019, Oman and the United States signed a “Strategic Framework Agreement” that
expands the U.S.-Oman facilities access agreements by al owing U.S. forces to use the ports of Al
Duqm (see above) and Salalah.50 Al Duqm is large enough to handle U.S. aircraft carriers, and
U.S. officials viewed the agreement as improving the U.S. ability to counter Iran.

44 “Updated: Oman Rejects Israeli Plan as Netanyahu Moves to Annex 75% of Area C.” International Middle East
Media Center
, September 15, 2019.
45 Much of this section is derived from: Department of State. “ U.S. Security Cooperation With Oman.” March 20,2020;
author conversation with U.S. and Omani officials (1990 -2020), and various press reports.
46 Hajjar, Sami. U.S. Military Presence in the Gulf: Challenges and Prospects. U.S. Army War College, Strategic
Studies Institute. 2002.
47 T estimony of Gen. Joseph Votel before the House Armed Services Committee. February 2018.
48 Contingency T racking System Deployment File, provided to CRS by the Department of Defense.
49 Department of State. Secretary Pompeo’s Meeting with Omani Sultan Qaboos bin Sa’id. January 15, 2019.
50 U.S. Embassy in Oman. U.S. Statement on the Signing of the Strategic Framework Agreement. March 24, 2019.
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Oman’s Defense Relations with other Militaries
In part because of his historic ties to the British military, Sultan Qaboos relied on seconded
British officers to command Omani military services early in his reign. In part because of his
historic ties to the British military, during the early part of his reign, and Oman bought British
weaponry. Over the past two decades, Oman has shifted its arsenal mostly to U.S.-made major
combat systems. Stil , as a signal of the continuing close defense relationship, Britain and Oman
signed a memorandum of understanding in April 2016 to build a base near Al Duqm port, at a
cost of about $110 mil ion, to support the stationing of British naval and other forces in Oman on
a permanent basis.51 In February 2018, India reportedly signed an agreement with Oman granting
the Indian navy the use of the port as wel .52
U.S. Arms Sales and Other Security Assistance to Oman53
Oman’s approximately 43,000-person armed force—collectively cal ed the “Sultan of Oman’s
Armed Forces”—is widely considered one of the best trained in the region. However, in large part
because of Oman’s limited funds, it is one of the least wel equipped of the GCC countries.
Oman’s annual defense budget is about $9 bil ion out of a total $30 bil ion budget.
Oman is trying to expand and modernize its arsenal primarily with purchases from the United
States, assisted by relatively smal amounts of U.S. Foreign Military Financing (FMF). Oman
also is eligible for grant U.S. excess defense articles (EDA) under Section 516 of the Foreign
Assistance Act. Since 2014, the United States has provided Oman with over $13 mil ion in
Foreign Military Financing. None is requested for FY2021. As of March 2020, the United States
has 72 active cases valued at $2.86 bil ion with Oman under the government-to-government
Foreign Military Sales (FMS) system. Since 2014, the U.S. has also authorized the permanent
export of over $730 mil ion in defense articles to Oman via the Direct Commercial Sales (DCS)
process. The top categories of DCS to Oman include: gas turbine engines, military electronics,
and firearms.
The most significant FMS cases, current and past, are discussed below.
F-16s. In October 2001, Oman purchased 12 U.S.-made F-16 C/D aircraft and
associated weapons (Harpoon and AIM missiles) at an estimated value of $825
mil ion. Deliveries were completed in 2006. In 2010, the United States approved
a sale to Oman of 18 additional F-16s and associated support, and Oman signed a
contract with Lockheed Martin for 12 of the aircraft in December 2011, with
deliveries completed in 2016.54 Oman’s Air Force also possesses 12 Eurofighter
“Typhoon” fighter aircraft.

51 “UK to Have Permanent Naval Base in Oman, MoU Signed.” Middle East Confidential. April 1, 2016. http://me-
confidential.com/12289-uk-to-have-permanent-naval-base-in-oman-mou-signed.html.
52 Shubhajit Roy, “India gets access to strategic Oman port Duqm for military use, Chabahar-Gwadar in sight,” Indian
Express
, February 13, 2018.
53 Much of the information in this section is taken from the State Department fact sheet “U.S. Security Cooperation
with Oman.” March 20. 2020. Section 564 of T itle 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.
54 “Oman to Upgrade Fleet of Lockheed Martin F-16 Fighting Falcons.” T he National Interest, January 7, 2018.
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Precision-Guided Munitions. Oman has bought U.S. munitions for its F-16s,
including “AIM” advanced medium-range air-to-air missiles (AIM-120C-7,
AIM-9X Sidewinder), 162 GBU laser-guided bombs, and other equipment.
Surface-to-Air and Air-to-Air Missiles. Oman has bought AVENGER and Stinger
air defense systems to help Oman develop a layered air defense system.
Missile Defense. In May 2013, then-Secretary of State John Kerry visited Oman
reportedly in part to help finalize a sale to Oman of the THAAD (Theater High
Altitude Area Defense system), the most sophisticated land-based missile defense
system the U.S. exports. A tentative agreement by Oman to purchase the system,
made by Raytheon, was announced in May 2013, with an estimated value of $2.1
bil ion, but no sale of the system has been completed.55 Several other GCC states
have bought or are in discussions to buy the THAAD.
Tanks as Excess Defense Articles. Oman received 30 U.S.-made M-60A3 tanks in
September 1996 on a “no rent” lease basis (later receiving title outright). In 2004,
it turned down a U.S. offer of EDA U.S.-made M1A1 tanks, but Oman asserts
that it stil requires armor to supplement the 38 British-made Chal enger 2 tanks
and 80 British-made Piranha armored personnel carriers it bought in the 1990s.
Patrol Boats/Maritime Security. Oman has bought U.S.-made coastal patrol boats
(“Mark V”) for counternarcotics, antismuggling, and antipiracy missions, as wel
as aircraft munitions, night-vision goggles, upgrades to coastal surveil ance
systems, communications equipment, and de-mining equipment. EDA grants
since 2000 have gone primarily to help Oman monitor its borders and waters and
to improve interoperability with U.S. forces. The United States has sold Oman
the AGM-84 Harpoon anti-ship missile. Oman has bought some British-made
patrol boats.
Antitank Weaponry. The United States has sold Oman antitank weaponry to help
it protect itself from ground attack and from attacks on its critical infrastructure.
The systems sold include TOW (tube-launched, optical y tracked, wire-guided)
antitank systems, with an estimated value of $51 mil ion and 400 “Javelin”
antitank guided missiles.56
Professionalizing Oman’s Forces: IMET Program and Other Programs57
The International Military Education and Training program (IMET) program provides
professional military education and training to military students and is key to establishing lasting
relationships with future leaders. IMET courses increase military professionalization, enhance
interoperability with U.S. forces, offer instruction on the law of armed conflict and human rights,
provide technical and operational training, and create a deeper understanding of the United States.
Since 2014, the United States has provided Oman with $10.901 mil ion in IMET which has
funded over 900 members of the Omani Armed Forces for training in the United States, including
47 members in FY 2018.

55 “Pentagon confirms Saudi $1 billion payment for T HAAD missile system.” The National, March 5, 2019.
56 State Department security cooperation factsheet, op.cit.
57 Ibid.
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Table 1. Recent U.S. Aid to Oman
($ in mil ions)

FY17
FY18
FY19
FY20
FY21 (req)
IMET
0
1.85
1.424
2.0
1.7
FMF
2.0




NADR Total
1.94
1.9
1.7
1.7
1.0
NADR ATA

.9

1.0

NADR EXBS

1.0

.7

Other DOD





Dept. Energy





Source: State Department Congressional Budget Justification, FY2021.
Notes: 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).
Dept. of Energy funds are for materials protection and nonproliferation.
Cooperation against Terrorism and Terrorism Financing58
Oman cooperates with U.S. legal, intel igence, and financial efforts against various cross-border
threats, particularly those posed by terrorist groups including Al Qaeda, Al Qaeda in the Arabian
Peninsula (AQAP, headquartered in neighboring Yemen), and the Islamic State organization. No
Omani nationals were part of the September 11, 2001, attacks and no Omanis have been publicly
identified as senior members of any of those groups. The State Department assesses that Oman
actively tries to deny terrorist safehaven in or transit, but that its effectiveness is limited by local
capacity and a chal enging operating environment because of Oman’s extensive coastline and
long, remote borders with Saudi Arabia and Yemen.
The United States provides funding—primarily through Nonproliferation, Antiterrorism,
Demining, and Related (NADR) and other programs—to help Oman counter terrorist and related
threats. NADR funding—Export Control and Related Border Security (EXBS), Anti-Terrorism
Assistance (ATA), and Terrorism Interdiction Program—enhance the capabilities of the Royal
Oman Police (ROP), the ROP Coast Guard, the Directorate General of Customs, the Ministry of
Defense, and several civilian agencies to interdict weapons of mass destruction (WMD),
advanced conventional weapons, or il egal drugs at land and sea borders. The funding is also used
to train Omani law enforcement agencies on investigative techniques and border security.
In 2005, Oman joined the U.S. “Container Security Initiative,” agreeing to pre-screening of U.S.-
bound cargo from its port of Salalah to prevent smuggling of nuclear material, terrorists, and
weapons. However, the effect of some U.S. programs on Omani performance is sometimes
hindered by the lack of clear delineation between the roles and responsibilities of Oman’s armed
forces and law enforcement agencies.
There are no Omani nationals currently held in the U.S. prison for suspected terrorists in
Guantanamo Bay, Cuba. During 2015-17, Oman accepted the transfer of 23 non-Omani nationals
from Guantanamo Bay as part of an effort to support U.S. efforts to close the facility.

58 Much of the information in this section is derived from the State Department Country Reports on T errorism for 2018,
released October 2019.
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Anti-Money Laundering and Countering Terrorism Financing (AML/CFT)
Oman is a member of the Middle East and North Africa Financial Action Task Force
(MENAFATF), a regional body to exchange information and best practices to curb money
laundering and the financing of terrorism.59 A Royal Decree in 2016 requires financial institutions
to screen transactions for money laundering or terrorism financing. In May 2017, Oman joined
with the other GCC states and the United States to form a Riyadh-based “Terrorist Finance Target
Center.” However, numerous perceived gaps in Oman’s performance remain, including
implementation of certification procedures for AML and CFT, issuing directives for the
immediate freezing and seizure of the assets of persons and entities on various U.N. sanctions
lists, and designating wire transfer amounts for customer due diligence procedures.
Countering Violent Extremism
The State Department characterizes Oman’s initiatives to address domestic radicalization and
recruitment to violence as “opaque.” Oman’s government, through the Ministry of Endowments
and Religious Affairs (MERA), has conducted advocacy campaigns designed to encourage
tolerant and inclusive Islamic practices, including through an advocacy campaign titled “Islam in
Oman.” The Grand Mufti of Oman, Shaykh Ahmad al-Khalili, has cal ed on Muslims to reject
terrorism.
Economic and Trade Issues
Oman has been in a difficult economic situation since at least 2014, when world oil prices fel
precipitously and stil have not recovered. Oman’s financial situation has been characterized by
budget deficits of approximately $10 bil ion per year over the past three years, and its financial
system has been made worse in 2020 by the economic effects of the COVID-19 outbreak. Oman
acted early to try to contain the pandemic by barring entry to travelers from China, South Korea,
Iran, and Italy, and by mandating closure of some schools and retail outlets and banning some
public gatherings.60 As of June 10, 2020, Oman has reported about 19,000 COVID-19 cases and
84 deaths from the disease.61
Oman has sought to avoid drawing down its estimated $17 bil ion in sovereign wealth reserves,
and it is searching for ways to financial y cope with the COVID-19 outbreak without doing so. In
June 2020, it reportedly has sought financial aid from some of the wealthier Gulf states,
particularly Qatar.62 The government also has cut subsidies substantial y and has reduced the
number of public sector employees.
In order to better position its economy over the longer term, Oman has been diversifying its
economy; in the first half of 2019, non-oil sectors contributed twice as much to Oman’s gross
domestic product (GDP) as did the energy sector.63 Oman has announced a “Vision 2020”
strategy. Its cornerstone is to attract foreign investment to positioning Oman as a trading hub,
centered on the $60 bil ion project to build up Al Duqm port. That project has attracted
investment from Iran, Kuwait, China, Saudi Arabia, South Korea, the United Kingdom, and the

59 Information on the MENAFAT F can be found at its home page: https://www.fatf-gafi.org/pages/menafatf.html
60 Marc Sievers. “ Oman’s handling of the coronavirus.” Atlantic Council, April 3, 2020.
61 Johns Hopkins Coronavirus Resource Center.
62 “Oman Weighs Seeking Financial Aid From Gulf Countries.” Bloomberg, June 11, 2020.
63 Non-Oil Sector’s Contributions to Oman’s GDP T wice the Oil Earnings. T imes of Oman, December 18, 2019
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United States. Oman’s plans for the port include a refinery, a container port, a dry dock, and
facilities for transportation of petrochemicals, with a rail link to the other GCC states that enables
them to access the Indian Ocean directly.64 China’s $11 bil ion investment in Al Duqm, part of its
“Belt and Road Initiative” to assemble a trade link between China and Europe, wil fund a “Sino-
Oman Industrial City.”
Yet, the energy sector wil remain significant in Oman for at least several more years. Oman has a
relatively smal 5.5 bil ion barrels of proven oil reserves, enough for about 15 years at current
production rates. It exports approximately 800,000 barrels of crude oil per day, mostly to China.
In part because it is a smal producer, Oman is not a member of the Organization of the Petroleum
Exporting Countries (OPEC). Oman has in recent years expanded its liquefied natural gas (LNG)
exports, primarily to Asian countries. Oman is part of the “Dolphin project,” operating since
2007, under which Qatar exports natural gas to UAE and Oman, freeing up Omani gas for export.
U.S.-Oman Economic Relations
The United States is one of Oman’s largest trading partners. In both 2018 and 2019, the United
States exported about $2 bil ion in goods to Oman, and imported about $1.1 bil ion in goods from
it.65 The largest U.S. export categories to Oman are automobiles, aircraft (including military) and
related parts, dril ing and other oilfield equipment, and other machinery. Of the imports, the
largest product categories are fertilizers, industrial supplies, and oil by-products such as plastics.
The United States imports almost no Omani oil.
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 in a broad range of industries, not limited to energy.



Author Information

Kenneth Katzman

Specialist in Middle Eastern Affairs


64 Hugh Eakin. “In the Heart of Mysterious Oman.” New York Review of Books, August 14, 2014.
65 U.S. Census Bureau. Foreign T rade Statistics.
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RS21534 · VERSION 109 · UPDATED
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