Oman’s economy is currently heavily reliant on oil and gas, which form the backbone of its revenue and exports. Hydrocarbon revenues account for approximately 70% of budget income, while the sector contributes around 30% to GDP. However, excessive dependence on oil is not a sustainable long-term strategy due to the finite nature of reserves and the global shift away from fossil fuels. Oman’s proven reserves stand at approximately 5.2 billion barrels of oil and 24 trillion cubic feet of natural gas, which—at current production rates—could last only a few more decades. Consequently, the country is focusing on boosting non-oil sectors, particularly mining.
Mining has been identified as a key pillar for economic diversification in Oman’s current Five-Year Plan and Vision 2040. The country is rich in diverse mineral resources, including metallic ores such as copper, chromite, iron ore, and manganese, as well as non-metallic minerals like marble, limestone, gypsum, silica, and dolomite. Some of these minerals have gained global significance—Oman is now the world’s largest exporter of gypsum, thanks to its high purity and abundant reserves. Additionally, the country has a long history of copper mining, particularly in Sohar, which is now experiencing a revival.
In December 2024, Oman’s state-owned Minerals Development Oman (MDO) joined a growing list of mining firms that have begun exporting concentrated copper ore, marking Oman’s reentry into global copper exports. MDO’s first shipment in 30 year comprised around 900 tonnes of concenters mined from the Lasail mine in Suhar. The development of other copper mines, such as Al Bidaya and Al Ghuzayn, is also underway to enhance production in the coming years.
The mining sector has undergone significant restructuring to maximize its potential. In 2020, the Public Authority for Mining was merged with the Ministry of Energy, forming the Ministry of Energy and Minerals, reflecting the strategic integration between traditional energy resources and mineral wealth. The ministry has been modernizing geological surveys and mapping, while also launching initiatives like the “Mining Lab” in 2018 to accelerate investment by identifying viable projects. These efforts have led to numerous mining sites being opened for private and foreign investment.
Promising resources
To date, Oman has signed 16 mineral exploration and exploitation agreements, including: 12 metallic mineral concessions granted to MDO for development; An agreement with British company Knights Bay for laterite ore exploration; and Three agreements with Omani companies, such as Mawarid Mining and Tasnim, for potash and lithium extraction.
This strategic approach—fostering partnerships between state-owned, private, and international firms—aims to accelerate mining projects while ensuring knowledge transfer and workforce development. Authorities expect these initiatives to triple the mining sector’s GDP contribution by 2023, reaching approximately RO 378 million, while creating at least 1,600 direct jobs for Omanis. In the longer term, mining is expected to play an even greater role in the economy, particularly with the expansion of copper mining and potential commercial production of strategic minerals like potash (for fertilizer production) and lithium (for battery manufacturing). While mining revenues may not match oil earnings in the near term, they will provide a complementary economic pillar, ensuring income diversification and long-term sustainability even after oil reserves are depleted.
Both mining and renewable energy are expected to serve as sustainable and diversified economic alternatives for Oman. In mining, the growing global demand for minerals—especially those used in future industries—makes the sector increasingly attractive. Copper, for instance, is crucial for clean energy technologies, including electric vehicles and power grids, meaning Oman’s increased copper production has a secure export market.
Additionally, the development of local downstream industries—such as copper alloy manufacturing, glass production from silica, and marble and ceramics industries—can enhance value-added exports rather than relying solely on raw material sales. Oman has already introduced legislation requiring investors to maximize local value-added processing before exporting minerals, ensuring long-term economic benefits.
Renewable energy as a sustainable alternative
Meanwhile, renewable energy represents the second key pillar of Oman’s post-oil transformation. The country is rich in solar and wind resources and has set an ambitious goal of generating 30% of its electricity from renewable sources by 2030. Several large-scale projects have already been launched to achieve this goal. In January 2025, Oman inaugurated Manah 1 and Manah 2, the country’s largest-ever solar power plants, located in Manah with a combined capacity of 1 gigawatt. Covering 14.5 million square meters and equipped with over 2 million bifacial photovoltaic panels, the plants use automated dry-cleaning robots to maintain efficiency. These projects immediately increased Oman’s renewable energy share from 6.6% to approximately 11%, while cutting carbon emissions by 1.4 million tonnes annually.
Such initiatives provide sustainable energy for domestic electricity consumption, reducing the reliance on natural gas. Previously, 95% of Oman’s electricity was generated using gas, but renewable energy expansion is now freeing up gas for petrochemical industries or LNG exports, generating additional revenues. Apart from solar energy, Oman has also developed its first commercial-scale wind farm—a 50-megawatt project in Dhofar, completed in partnership with Masdar (UAE). Future wind energy expansions are planned, particularly in central and southern Oman, where wind speeds are higher.
Additionally, the integration of green hydrogen production with renewable energy presents a dual economic opportunity—firstly as an export commodity, and secondly for domestic industrial use to reduce carbon emissions. If Oman meets its ambitious green hydrogen targets—1 million tonnes by 2030 and over 8 million tonnes by 2050—this could create an export industry comparable in scale to its current LNG exports. The projected benefits include: saving 3 billion cubic meters of natural gas annually; and avoiding 7 million tonnes of CO₂ emissions by 2030.
Strategic economic transition
Transitioning to a post-oil economy will not be immediate or easy. The oil and gas sector still provides a significant share of government revenue and employment, so any abrupt decline could disrupt economic stability. However, Oman is pursuing a gradual and well-planned diversification strategy. While developing emerging sectors like mining, tourism, fisheries, and logistics, the country is also ensuring maximum efficiency in oil and gas production. For example, instead of merely exporting crude oil, Oman is increasing local refining and petrochemical output: The $7 billion Duqm Refinery, a joint venture with Kuwait, produces high-value derivatives; while Suhar’s petrochemical complex is undergoing expansion.
Such projects will continue to leverage Oman’s hydrocarbon resources, even during the economic transition phase, while also laying the groundwork for future hydrogen-based industries. Additionally, Oman’s economic diversification program (Tanfeedh) has already encouraged private sector investment in mining and industry, leading to numerous new ventures.
In summary, Oman is betting on a combination of mining, renewable energy, and hydrogen to gradually reduce its reliance on oil. The success of this strategy depends on Oman’s ability to attract investment, transfer technology, and train Omani professionals for these emerging industries. Current indicators are promising—the revival of copper exports, Oman’s leadership in gypsum exports, and the completion of large-scale solar and wind projects all demonstrate a genuine commitment to building a diversified and sustainable economy.
The author is the head of Oman Observer's Business section
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