S&P Upgrades Oman Growth Forecast to 3.5% Amid Iran Conflict

S&P Global Ratings has upgraded its forecast for Oman's economic growth to 3.5% due to the country's favorable trade logistics, which will enable it to maintain the strength of its energy sector during the ongoing Iran conflict.

The credit ratings agency cited Oman's unobstructed trade routes as a key factor in the upgrade, allowing the nation to expand its oil and gas production capacity. The country's ports at Duqm, Mina Al Fahal, and Salalah have direct access to the Arabian Sea, bypassing the Strait of Hormuz, which has been a flashpoint in the regional conflict.

Oman is expected to raise its crude oil output to 1.2 million barrels per day, underpinning real GDP growth through 2029, according to S&P. The agency noted that while non-oil growth may be impacted by the geopolitical circumstances, oil production and GDP are expected to benefit from heightened activity in the hydrocarbon sector.

S&P maintained Oman's long-term credit rating at investment grade, assigning it BBB-, one notch above junk status, with a stable outlook. The agency views Oman's fiscal and external buffers as sufficient to shield the sovereign against unfavorable geopolitical events.