Oman’s Hydrocarbon Revenue Decline: What It Means for Investors and Business Owners
The Sultanate of Oman’s public revenue reached RO 8,481 million by the end of the third quarter (Q3) of 2025, marking an 8 percent decline from RO 9,198 million during the same period in 2024. This decrease is primarily attributed to a drop in hydrocarbon revenues, according to the Ministry of Finance’s Quarterly Bulletin.
The average oil price stood at $72 per barrel in Q3 2025, down from $83 per barrel in the corresponding quarter of the previous year. Additionally, average oil production fell to 933 barrels per day (bpd) from 1,000 bpd.
Total public spending amounted to RO 8,914 million, resulting in a State General Budget deficit of RO 433 million.
Net oil revenue totaled RO 4,710 million by the end of Q3 2025, reflecting a 13 percent decrease from RO 5,436 million in Q3 2024. This decline was caused by lower average oil prices and reduced production. Net gas revenue also fell by 4 percent to RO 1,296 million, down from RO 1,345 million, influenced by changes in the Integrated Gas Company’s revenue collection methodology.
Current revenue increased slightly by 2 percent to RO 2,449 million, compared to RO 2,399 million in Q3 2024.
Public spending rose by 2 percent to RO 8,914 million, up RO 191 million from RO 8,722 million in the same quarter last year, driven by a 31 percent increase in development expenditure, which rose by RO 263 million.
Current expenditure decreased marginally by 1 percent, totaling RO 6,227 million, compared to RO 6,152 million in Q3 2024. However, development expenditure for ministries and government units surged to RO 1,103 million, exceeding the allocated budget of RO 900 million by 23 percent due to the accelerated progress of ongoing projects.
Contributions and other expenses dropped by 9 percent, amounting to RO 1,583 million compared to RO 1,731 million the previous year. Subsidies included RO 378 million for the electricity sector, RO 424 million for social protection, and RO 55 million for oil products. Additionally, RO 300 million was allocated to future debt obligations.
By the end of Q3 2025, spending on social sectors and basic services totaled RO 3,817 million, distributed as follows: 37 percent for education, 26 percent for social security and welfare, 11 percent for housing, and 26 percent for health.
The Ministry of Finance paid over RO 1,225 million to the private sector by Q3 2025 through the financial system with full documentation, demonstrating a commitment to settle dues within an average of five working days.
Public debt increased slightly to RO 14.7 billion at the end of Q3 2025, compared to RO 14.4 billion in Q3 2024.
Looking ahead, global economic growth is projected at 3 percent in 2025 and 3.1 percent in 2026, while inflation is expected to ease to 4.2 percent in 2025 and 3.6 percent in 2026. Brent crude’s average spot price is forecasted to decline to $62 per barrel in 2025 and further to $52 per barrel in 2026, driven by oversupply relative to global demand.
By Q2 2025, Oman’s GDP growth at constant prices reached RO 9,363 million, a 2.1 percent increase from RO 9,168 million in Q2 2024.
Special Analysis by Omanet | Navigate Oman’s Market
The decline in Oman’s hydrocarbon revenue, driven by lower oil prices and production, signals a critical need for economic diversification to reduce dependency on volatile oil markets. For businesses and investors, this creates both a risk in traditional energy sectors and an opportunity in emerging industries and development projects, as public spending on development has surged despite the budget deficit. Smart entrepreneurs should focus on sectors linked to the accelerated execution of development initiatives and social services, positioning themselves to benefit from government-driven economic transformation.
