Fitch foresees limited impact on Oman from Hormuz shutdown

MUSCAT: A drawn-out closure of the Strait of Hormuz would leave Oman relatively insulated compared with most of its Gulf neighbours, according to projections published by Fitch Ratings.
In a commentary on the implications of the closure of the strategic shipping gateway for Middle East sovereigns, the ratings agency noted that the impacts will vary, although all six Gulf Cooperation Council countries in question 'can absorb it within their current rating levels, based on our expected duration for the war'.
“Our baseline is that the Strait will remain effectively closed for less than a month and that there will be no major damage to energy production and transport infrastructure. However, there are significant risks to these assumptions”.
GCC member states (except Oman) and Iraq ship most of their hydrocarbon exports through the Strait of Hormuz. Bahrain, Iraq, Kuwait and Qatar send between 87 per cent and 95 per cent of their exports through the Strait. Iraq and Qatar have already shut down a significant share of their production.
“We estimate each week of closure will reduce hydrocarbon export proceeds by around 0.4 per cent of GDP for these four sovereigns, based on data for 2025 shipments through Hormuz and an assumed oil price of $85 a barrel during the closure”, the ratings agency commented.
In this scenario, Oman stands out as the only Gulf sovereign with zero hydrocarbon export exposure through Hormuz, says Fitch Ratings. As a result, rather than suffering a fiscal hit, Oman’s GDP is projected to rise modestly — by 0.2 per cent after one week, 0.4 per cent after two weeks and 0.8 per cent after four weeks of closure.
This contrasts sharply with other Gulf exporters whose oil and gas shipments rely heavily on the waterway. Bahrain, Iraq and Qatar would see the steepest GDP contractions, with four-week losses ranging from 1.8 to 1.9 per cent of GDP. Kuwait, which sends close to 100 per cent of its hydrocarbon exports through the Strait, would face a 1.5 per cent GDP hit after four weeks, while Abu Dhabi’s impact would reach 0.6 per cent.
Saudi Arabia appears comparatively less exposed, with only around 20 per cent of exports passing through Hormuz, reflecting the availability of its East-West pipeline. Its projected GDP impact remains negligible even in a four-week closure scenario.
Oman’s insulation stems from its geography: all of its crude exports are shipped from terminals outside the Strait, notably via ports on the Sea of Oman and the Arabian Sea.
“Oman stands to benefit from the higher oil prices as its exports do not transit the Strait”, Fitch summed up in conclusion.