Oman slashes budget deficit on higher hydrocarbon revenues

Oman increased spending by 8.6 percent in the first quarter of 2026 but reported an annual deficit cut of 82 percent thanks to higher hydrocarbon income, the ministry of finance said.

The sultanate recorded spending of OMR3 billion ($7.8 billion) while revenues increased 13 percent to OMR2.98 billion resulting in a budget deficit of OMR25 million, the ministry’s data showed.

The ministry said the increase in spending was due to “extra expenditure in the civil ministries” but did not provide further details.

The first-quarter climb in revenues was due to gas income rising by 36 percent and oil income by 5 percent, the official data showed.

Logistics officials say that Oman’s oil and gas exports were not affected by Iran’s closure of the Strait of Hormuz.

“Since the Strait of Hormuz is partly in Oman’s waterway, its hydrocarbon exports were not affected, unlike other GCC countries,” said Abdullah Al Busaidi, director general of the state-run Oman Logistics Centre.

Oman produces an average of a million barrels of crude oil a day.

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It sold its oil at an average price of $64 per barrel in the first quarter of this year, up from $62 per day in the same quarter in 2025, the ministry data shows.

While Brent crude oil prices have risen from around $60 a barrel at the start of 2026 to a peak of around $120 in March at the height of the Iran war, this is not reflected in the first-quarter data due to the method Oman uses to report revenue.

The revenue figures are recorded when oil is delivered, not when sales are agreed. “Accordingly, revenue collection generally occurs three months after the execution of the sales contract,” the report said.