Oman growth is expected to reach 3.5% in 2026, according to a revised forecast from S&P Global Ratings. The agency also maintained Oman’s long-term sovereign rating at BBB-. It kept the short-term rating at A-3 and retained a stable outlook. The revised forecast marks a significant increase from the previous 1.6% estimate. Higher oil and gas production will support the stronger economic performance. Energy exports and Oman’s trade position will also contribute to the improved outlook.
The ratings assessment also highlighted Oman’s fiscal and external financial buffers. Liquid government assets exceed 40% of gross domestic product. Foreign currency reserves also represent nearly 20% of GDP. These buffers provide additional support during periods of external pressure. S&P expects Oman to record a fiscal surplus of 4.8% of GDP in 2026. It also expects another surplus of around 2.2% in 2027. Public debt should remain around 30.2% of GDP by the end of 2026.
Oman’s location also supports its energy export outlook. Several major ports provide direct access to the Arabian Sea. This allows Oman to move energy exports without relying entirely on the Strait of Hormuz. Consequently, the country can maintain important trade routes during regional disruptions. The ratings assessment noted this geographic advantage as an important factor. Meanwhile, Oman continues strengthening its position as a regional logistics and trading hub. Cargo activity at Salalah and Sohar ports also increased during the first half.
Hydrocarbons remain central to Oman’s economic and fiscal performance. Oil and gas account for around 30% of the country’s GDP. They also represent about half of merchandise exports and 70% of government revenue. S&P expects oil production to reach around 1.1 million barrels per day in 2026. Production could then rise toward 1.2 million barrels per day between 2027 and 2029. However, Oman continues working to expand economic activity beyond hydrocarbons. Non-oil activity grew by about 1.3% during the first half of 2026.
Trade, logistics, information technology and financial services supported the non-oil economy. Port activity also showed stronger performance during the first half of the year. Cargo volumes at Salalah Port increased by about 15%. Volumes at Sohar Port rose by approximately 52%. These developments support Oman’s longer-term diversification plans. They also strengthen the country’s role as a regional transport and trade center. Meanwhile, authorities continue advancing reforms linked to Oman Vision 2040.
The country has also made progress on fiscal reforms and economic governance. S&P highlighted stronger coordination across public finance institutions. It also pointed to greater transparency in government economic data. Oman publishes quarterly GDP and fiscal information. It also releases annual international investment position data. Furthermore, the country participates in the IMF’s Article IV consultation process. These measures have supported greater visibility around economic conditions and government finances. Oman returned to investment-grade status in September 2024 after a ratings upgrade.
Oman growth could moderate after the strong 2026 expansion. S&P expects average annual growth of around 2.4% between 2027 and 2029. The forecast reflects expectations for continued energy production and broader economic activity. However, the country remains exposed to changes in oil prices. Regional geopolitical developments could also affect trade and investment conditions. Even so, Oman’s fiscal and external buffers provide additional support against potential disruptions. The stable outlook reflects these financial strengths and the progress of economic reforms.
Looking ahead, further improvements will depend on continued fiscal discipline and economic diversification. S&P also highlighted the importance of developing Oman’s domestic capital markets. Stronger non-oil growth could further reduce dependence on hydrocarbon revenues. Meanwhile, continued reforms could support investment and improve economic resilience. Oman currently holds investment-grade sovereign ratings from the major international agencies. The latest assessment therefore highlights stronger growth alongside continued fiscal and economic reform. Oman growth will remain closely linked to energy production and diversification progress.
