S&P Global Ratings said Oman's fiscal health and strategic location will help it withstand the effects of the continuing regional conflict, as it affirmed the country's credit rating and stable outlook.
The agency affirmed its investment-grade BBB- long-term and A-3 short-term foreign and local currency sovereign credit ratings on the country, New York-based S&P said on Friday.
Investment grade makes it easier for a country to access capital markets and raise funding when it wants to borrow.
S&P said the buffers include liquid government assets in excess of 40 per cent of gross domestic product and gross foreign currency reserves near 20 per cent of GDP.
Those would be "sufficient to preserve its creditworthiness against adverse geopolitical developments", analysts at S&P said.
Critically, S&P pointed out that Oman is the only Gulf state whose exports do not depend on the Strait of Hormuz, the key chokepoint for a fifth of the world's energy shipments that has been effectively shut amid the war.
Oman exports oil and gas primarily through ports such as Duqm, Mina Al Fahal and Salalah, which have direct access to the Arabian Sea, "significantly reducing its vulnerability to maritime disruption".
S&P cautioned, however, that any escalation of attacks from Iran, especially on its energy and civilian infrastructure, would merit a downgrade.
Oman, much like its Gulf neighbours, has also endured strikes from Iran. At least one energy infrastructure and eight logistics facilities have been targeted, data compiled by the International Institute for Strategic Studies shows.
Oman’s fiscal position would weaken because of a "severe disruption to oil production or economic activity as a consequence of an escalation of the Middle East war", S&P said.
"Downside pressure could also emerge if conflict-related spending increases and reverses the government’s fiscal consolidation efforts."
S&P expects Oman's gross domestic product growth at 1.4 per cent in 2026, down from a previous 2.2 per cent forecast, before rebounding to average 2.3 per cent from 2027 to 2029.
"Growth will be sustained by higher oil prices and the expectation that Opec+ will support supply expansion," S&P said.
Oman, a member of Opec+, is one of the smaller oil producers in the Gulf that also continues to diversify its economy away from crude dependence.
The oil industry plays a key role in Oman’s modern and expansive infrastructure, including electric utilities, roads, public education and medical services, according to the US International Trade Administration.
In January, Oman approved its national budget for 2026 and launched the next phase of its economic programme that aims for 4 per cent growth through 2030. Also that month, the sultanate approved the creation of an international financial centre, giving the sultanate a new tool to attract capital.
"Oman has made progress in addressing significant structural challenges – including high budgetary and external deficits, and subdued economic growth," S&P said.
"This includes government efforts to structurally reform public finance and address governance issues, which in part was aided by a supportive oil market. Transparency has also improved with increased data disclosure."
