Oman holds the unique rank of being one among only 20 countries globally to maintain a comprehensive Free Trade Agreement (FTA) with the United States. Along with Bahrain, Oman has privileged trade access to the world’s largest consumer market. Yet, the US-Oman FTA remains one of the most underutilized cross-border advantages in Oman Vision 2040 and the larger Gulf economic landscape.
BILATERAL REALITIES
In 2009, the United States and Oman signed a Free Trade Agreement (FTA), signaling increased opportunities for American and Omani businesses. Oman’s geographical coordinates are critical to the United States’ objectives of navigating naval chokepoints, economic power play with rivals Iran and China, and regional stability with Yemen.
US exports to Oman consistently dominate the automobile, aviation and industrial sectors. Conversely, American demand is geared toward Omani industrial supplies, bauxite, aluminium, fertilisers, jewellery, plastics and fuel oil. Omani aluminum plating and jewellery exports in 2024 grossed over $231 million and $218 million respectively, while August 2026 saw raw plastic sheeting ($29.4 million), nitrogenous fertilizers ($24.9 million) and cyclic hydrocarbons ($20.5 million) driving current exports.
However, macro-velocity has hit a wall. Bilateral trade sat at $3.2 billion in 2021, plateauing at $3.3 billion by 2025.
TRADE BLIND SPOTS
Logistical costs: For Omani businesses, shipping goods to the UK or continental Europe is faster and cheaper than sailing across the Atlantic to US ports. The 2026 UK-GCC Free Trade Agreement has now made commerce even easier by eliminating tariffs on all current imports from the GCC.
Market naïveté: Omani goods enjoy access to the US Customs Reconciliation programme. This means an entry summary can be filed using best estimates without penalties when exact values are not yet known.
Omani businesses also enjoy duty free treatment and no minimum threshold for investment. But while large US industrial and green energy firms heavily utilise Oman’s 100 per cent foreign ownership rights and no-minimum capital rules, small and medium enterprises (SMEs) in Oman remain unfamiliar with navigating the US market.
Regulatory obstacles: The US requires a massive 35 per cent local value-added component for a product to qualify as "Made in Oman." Since many Omani factories import raw materials from neighbouring countries, they struggle to meet the documentation and compliance tracking required. The additional 12.5 per cent on top of base-tariffs under Section 301 labour rights scrutiny has further increased difficulties.
Corporate differences: Oman’s traditional risk-averse business frameworks clash with American high-velocity capitalist values. While neighbouring UAE and Saudi Arabia have successfully channeled the aggressive operational momentum needed to dominate the US market, Oman’s calculated posturing introduces strategic delays for US transactions.
VISION 2040 ACCELERATION PATHWAY
Solidifying the sovereign goals outlined under Oman Vision 2040 mandates rigid entity vetting, corporate hygiene and proactive cross-border engagement. The opening of the Oman Trade Office in the United States in 2025, followed by the MOU signed between the US Embassy and the American Chamber of Commerce of Oman, are crucial steps to address economic blind-spots.
Two-way trade initiatives include bolstering ties with Arizona through the State Partnership Programme, and finalising a Sister Port MOU between Louisiana and Duqm. Implementing strict compliance frameworks, executing containment protocols, transitioning from legacy mindsets, and diversifying economic pathways for Omani SMEs are the ultimate keys for breaking the gridlock that has historically stalled the US-Oman Free Trade Agreement.
Oman Observer is now on the WhatsApp channel. Click here
