Economic Diversification and Energy Security in Oman: Natural Gas, the X Factor?

Abstract

Abstract Given its limited oil and gas resources compared to its neighbours, energy diversification has been Oman’s stated goal since at least the 1980s. Yet, this paper argues that, due to the country’s structure of power generation, both issues of economic diversification and energy security are intimately linked and cannot be dissociated. Oman’s national policy for the energy sector, the political and economic challenges of the energy subsidy reforms implemented since the mid-2010s and the energy priorities as highlighted in the new long-term “Oman Vision 2040” national strategy are examined here. This paper also shows that the energy debate has played a critical role in the shaping of Oman’s foreign policy towards its Gulf Cooperation Council (GCC) counterparts, Iran and India, out of a desire to keep Oman’s –– more symbolic than real –– independence in working out its energy needs.