Oman posts $2.4bn budget surplus on oil and gas boost

Oman posted a budget surplus of 931 million Omani rials ($2.4 billion) for the 2023 financial year after a more-than-anticipated rise in public revenue due to higher oil and gas production and prices.

The surplus for the year compares with a deficit of about 1.3 billion rials that the country’s budget earlier estimated, Oman News Agency reported on Monday, quoting preliminary Ministry of Finance data.

Public revenue rose to 12.21 billion rials last year, up by about 2.16 billon rials from what was approved in the budget, while public spending stood at 11.282 billion rials.

Net oil revenue is expected to have risen by 29 per cent to 6.88 billion rials while net gas revenue rose by an estimated 43 per cent to about 2 billion rials “as a result of the rise in gas production and prices”, the news agency reported.

The government was also able to reduce the public debt by 2.4 billion rials to 15.2 billion rials, which led to savings of 140 million rials from the cost of servicing the debt. The Gulf nation, which is heavily dependent on hydrocarbons, launched a three-year fiscal stability programme in November 2022 to add momentum to its economic recovery from the coronavirus-driven slowdown and support the development of its financial sector.

Oman’s economy is expected to grow by 1.3 per cent in 2023, down from 4.3 per cent in 2022, due to Opec+ oil production cuts, the International Monetary Fund said in November.

However, growth is set to rebound this year, supported by higher hydrocarbon production and stronger non-hydrocarbon growth, the IMF said. Brent, the global benchmark for two thirds of the world’s oil, topped $95 a barrel in September as voluntary supply cuts by Opec+ members Saudi Arabia and Russia tightened the crude market.

However, despite geopolitical instability in the Middle East, rising exports from sanctioned countries and concerns about the global economy have dragged crude prices lower.

In its 2024 budget, Oman expects net oil revenue of about 5.91 billion rials and net gas revenue of about 1.57 billion rials, the ministry said.

Non-oil revenue has been forecast at 520 million rials.