Oman Q1 Deficit Narrows to RO25m: What the 36% Surge in Gas Revenues Means for Investors and Entrepreneurs
MUSCAT: Oman’s fiscal deficit significantly narrowed to RO25 million in the first quarter of 2026, driven by increased oil and gas revenues despite a rise in public expenditure, according to the Ministry of Finance’s quarterly financial performance bulletin.
Total public revenues grew by 13 percent year-on-year, reaching RO2.985 billion by the end of March, up from RO2.635 billion in the same period of 2025. Public spending rose 9 percent to RO3.010 billion.
The improved fiscal position was primarily attributed to higher hydrocarbon income. Gas revenues surged 36 percent to RO593 million, compared to RO436 million a year earlier. Net oil revenues also rose by 5 percent, totaling RO1.535 billion.
Current revenues increased by 13 percent to RO817 million, reflecting ongoing gains in non-oil revenue streams.
During the quarter, the average realized oil price was $64 per barrel, with average oil production at approximately 1.025 million barrels per day.
On the expenditure side, current spending climbed 8 percent to RO2.119 billion, while development expenditure sharply increased by 31 percent to RO334 million, highlighting accelerated implementation of development and economic transformation projects. Development spending accounted for 26 percent of the total RO1.3 billion development allocations approved for 2026.
Contributions and other expenditures declined by 15 percent to RO417 million. Subsidies amounted to RO154 million for the social protection system, RO80 million for the electricity sector, and RO17 million for petroleum products by quarter-end.
Spending on social and essential sectors reached approximately RO1.233 billion, with education comprising the largest portion at 39 percent. Social protection and welfare represented 28 percent, health 25 percent, and housing 8 percent of this expenditure.
The Ministry of Finance also reported settling more than RO362 million in dues to private sector companies through the government financial system, with payments processed on average within five working days following documentation completion.
Oman’s public debt stood at around RO14.5 billion at the end of the first quarter, remaining broadly stable compared to the end of 2025 and rising by 2 percent from the same period last year.
The ministry emphasized that oil revenues are recorded in the state budget only after the completion of sale, delivery, and financial collection processes, which means revenues may be recognized several months after crude sales agreements are signed.
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Oman’s fiscal deficit narrowing to RO25 million amidst higher hydrocarbon revenues signals strengthened fiscal resilience and a more stable economic environment for businesses. The surge in gas revenues and increased development spending offers significant opportunities for investors and entrepreneurs to capitalize on the expanding energy sector and infrastructure projects. Smart investors should monitor non-oil revenue growth and government payment efficiency, as these trends indicate a diversifying economy and improved business climate.
