Stable economy

“Oil price went up a little, provided it did not go down again,” added Scacciavillani. “You must understand that this is because the cost of extracting oil is about the same.”

“What this means for smaller oil-producing nations such as Oman is a more stable economy in the future, because the price of oil is expected to stay at this level, and any fluctuations in the price will be very small,” added Scacciavillani. “This means that the worst days are past us, but people should not imagine that just because that is the case that we can go back to the boom-time again. A lot of the oil extraction contracts were negotiated during the period of the downturn with long-term deals fixed at prices that reflected that market.”

“In addition, Oman has borrowed money from international lenders and will need to pay it back,” he said. “Once this happens, then the government can once again begin to put money into the system. I think that throughout the rest of this year, and going into next year, the economy will begin to stabilise and we should see its effects by the end of next year.”

Scacciavillani, who has been with the Oman Investment Fund for more than seven years, added that the price of oil was governed by many global and local factors.

US curbs

“Globally, the impact of US sanctions on Iran, as well as the dire situation in Venezuela, both of which are oil-producing nations, have driven up the cost of the price of oil,” he explained. “That and the comfort of the Saudi position for the current oil producing status are some of the main reasons behind the oil prices, because they are among the biggest producers of oil in the world.”