MUSCAT: With the price of Oman crude oil soaring to record highs this week, energy analysts and economists have highlighted the geopolitical drivers underpinning the surge, beyond pure market forces.
Oman’s benchmark crude climbed to $152.58 per barrel for May delivery on Tuesday, as buyers scrambled for alternative supply sources amidst the escalating US-Israeli-led conflict involving Iran.
On Wednesday, March 18, 2026, the official price for May delivery rose further to $153.12 per barrel — up 54 cents from the previous day — according to Oman News Agency (ONA).
Mazhar Pasha, Executive Director at Syndicate Capital, described the rally as reflecting Oman’s role as a “rare point of stability” amidst disruption that has effectively constrained flows through the Strait of Hormuz.
“Exports from Mina Al Fahal — strategically located outside the Strait on the Sea of Oman — continue uninterrupted, positioning Omani crude as a premium and reliable alternative in an increasingly fragmented and volatile market”, he said, adding that the fiscal implications of elevated oil revenues could be “profound” for the Sultanate of Oman.
“With the 2026 budget anchored at a conservative $60 per barrel assumption, current price levels are generating revenues far beyond projections — potentially transforming fiscal deficits into substantial surpluses and accelerating investments aligned with Oman Vision 2040”, he added.
Bhavya Chhawchharia, Relationship Manager — Large Corporate Banking at Oman Arab Bank, noted that while attention remains on oil — about 20% of global flows pass through the Strait of Hormuz — the more significant shift is the quiet reallocation of capital across the GCC, with Oman increasingly in focus.
As infrastructure projects recalibrate through phased capital expenditure, localised supply chains and ECA/DFI-backed financing and as trade routes diversify to reduce reliance on chokepoints, Oman’s strategic advantage is becoming clearer. With all its oil and LNG exports bypassing Hormuz and key hubs such as Port of Duqm, Port of Sohar and Port of Salalah gaining prominence, the Sultanate of Oman is positioning itself as a resilient logistics and industrial gateway, he explained.
Backed by strong regional banking liquidity exceeding $300 billion and a shift towards structured, cash flow-driven financing, capital is increasingly flowing into Oman’s energy, infrastructure and green hydrogen pipeline — underscoring a broader reset in risk pricing and investment strategy, with Oman emerging as a key beneficiary, he added.
Azza al Habsi, economist at Ominvest, cautioned that while record crude prices may bring short-term revenue gains, the broader outlook remains concerning, as wars rarely produce true economic winners.
Even for the GCC, indirect impacts are already evident through slower investment, disrupted trade and tourism, rising reconstruction costs and increased defence spending. More critically, the region’s long-standing perception as a stable investment hub is being eroded, with a lasting geopolitical “risk premium” likely to shape investor behaviour, she warned.
The disruption extends well beyond oil, affecting LNG, petrochemicals, fertilisers, shipping, aviation and logistics, with supply chains already rerouted and impacts that may take months to fully materialise, she added.
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