Energy
Oman emerges as strategic transit and energy hub for the Gulf
Oman is positioning itself as a vital energy and transit alternative for the Gulf amid regional conflict, though significant logistical and geopolitical risks remain.
Key points
- Oman expects 4.1 per cent economic growth while reducing its debt burden to around 35 to 36 per cent of GDP.
- New infrastructure projects like the Hafeet Rail and potential pipeline routes aim to bypass vulnerable maritime chokepoints.
- State investor OQ plans to expand oil storage at Duqm to 10 million barrels within three years.
What happened
Oman is strengthening its position as a critical transit route and energy security node within the Gulf region, benefiting from elevated oil and gas exports and industrial base expansion. According to The National, the sultanate anticipates economic growth of 4.1 per cent, contrasting with regional downgrades by the IMF, while its debt burden has fallen from 68 per cent of GDP in 2020.
Strategic infrastructure developments are accelerating to bypass volatile maritime routes such as the Strait of Hormuz and the Bab Al Mandeb strait. Construction on the Hafeet Rail linking Sohar to the UAE began in May 2024 and is slated for completion in late 2027. Meanwhile, state energy investor OQ plans to expand crude storage capacities at Duqm to 10 million barrels over the next three years, eventually targeting 40 million barrels. Saudi Aramco is also studying a potential 1,000 to 1,200 kilometre pipeline to Duqm, estimated to cost $7 billion.
What comes next
Despite these advancements, Oman faces notable challenges. Analysts note that Omani facilities remain within proximity to Iran and could face direct threats if hostilities escalate or if regional neighbors view the new bypass routes as a challenge to existing multi-billion-dollar terminals. Furthermore, a sudden shift toward regional peace could render long-term infrastructure projects underutilised.
Why it matters
For energy investors and policymakers across Africa, the Omani experience highlights the complex interplay between physical infrastructure resilience and geopolitical risk. While African oil and gas producers continue to evaluate export routings and regional trade corridors, major global benchmarks reflect ongoing market sensitivities, with Brent spot prices recorded at $126.55 per barrel on 14 October 2026, according to US EIA data. Securing reliable investment for cross-border transit requires deep political alignment and careful risk assessment to avoid stranded assets during shifting geopolitical landscapes.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
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Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
