MUSCAT, AUGUST 24
A renewed rise in global oil prices has pushed crude well above the assumption underpinning Oman’s 2026 state budget, but the impact on government revenue will not be immediate because of the way oil receipts are collected and recorded.
Brent crude was trading at around $93 a barrel on Monday amidst continued uncertainty over Middle East supplies, compared with the $60-a-barrel average oil-price assumption used to prepare Oman’s budget for this year.
The gap is significant, but the two figures should not be read as a direct measure of additional revenue for the government.
Brent is an international benchmark, while the $60 figure is a budget-planning assumption. More importantly, Ministry of Finance data show that oil revenue moves through three stages — sale, delivery and financial collection — before it is recorded in the state accounts.
The ministry illustrates the process with oil sold in January 2026: the crude is delivered in March and the proceeds are collected in April, around three months after the sale contract is concluded.
That timing means movements in global oil markets can take several months to become visible in reported government revenue.
It is a distinction that becomes particularly important when crude prices move sharply. A rise in the market today does not translate into an equivalent increase in government receipts in the same reporting period — just as a sudden fall would not necessarily be reflected immediately.
The Ministry of Finance says oil revenue recorded during the 2026 fiscal year comes from sales made between October 2025 and September 2026.
Oman’s first-quarter fiscal figures illustrate the difference between prevailing market prices and the prices reflected in government accounts.
The average realised oil price during the first three months of 2026 was about $64 a barrel, while average production stood at around 1.025 million barrels per day.
Net oil revenue rose 5 per cent year-on-year to RO 1.535 billion from RO 1.468 billion. Net gas revenue increased more strongly, rising 36 per cent to RO 593 million from RO 436 million.
Total public revenue reached RO 2.985 billion in the first quarter, up 13 per cent from RO 2.635 billion a year earlier. Expenditure increased at a slower rate of 9 per cent to RO 3.010 billion from RO 2.771 billion.
The resulting budget deficit narrowed to RO 25 million from RO 136 million in the corresponding period of 2025.
Development expenditure also increased during the quarter, rising 31 per cent to RO 334 million from RO 254 million.
For the full year, Oman has budgeted revenue of RO 11.447 billion against expenditure of RO 11.977 billion, leaving an estimated deficit of RO 530 million. The 2026 budget was prepared on an average oil-price assumption of $60 a barrel.
Net oil revenue is budgeted at RO 5.752 billion for the year, while net gas revenue is estimated at RO 1.961 billion.
The latest rise in crude prices therefore provides a potentially supportive backdrop for Oman’s public finances if higher prices are sustained. The eventual impact, however, will depend on realised selling prices, production volumes and the timing of collections rather than the headline market price alone.
That distinction is likely to remain important over the coming quarters as energy markets continue to respond to supply uncertainty in the Middle East.
For assessing Oman’s fiscal position, the key measure will be the realised price and volume of crude sales whose proceeds actually enter the government accounts — rather than the oil price quoted on any single trading day.
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