Muscat – Oman has emerged as the only GCC country that has seen a steep decline in its fiscal breakeven oil price to approximately $65 per barrel in 2024, compared to $80 per barrel in 2021, according to Standard Chartered.

This significant decline in the fiscal breakeven oil price was partly responsible for the sultanate’s consecutive sovereign rating upgrades to BB+ from B+ in 2021, Standard Chartered said in its Global Focus Report for Q3 2024, released on Monday.

Standard Chartered projects that a continued reduction in the sultanate’s debt-to-GDP ratio, improved fiscal performance, and a commitment to medium-term reforms could enable Oman to regain its investment-grade rating in the near future.

The leading international banking group anticipates a further decline in Oman’s public debt to 34% of GDP by the end of 2024, supported by sustained twin surpluses.

‘An eventual shift to refinancing could create space to support the domestic economy while boosting the Central Bank of Oman’s foreign exchange reserves,’ Standard Chartered noted.

‘Economic activity is projected to grow due to investment initiatives driven by the Future Fund Oman, with Oman more insulated than GCC peers from OPEC+ oil production cuts given its natural gas output expansion,’ it added.

Oman’s non-oil sector – which accounts for 70% of real GDP – is set to grow, picking up to 3.0% in 2024 from 2.4% in 2023, driven by sectors such as tourism, manufacturing, and trade, according to the Standard Chartered report.

Hussain al Yafai, CEO of Standard Chartered Oman, said, “Oman’s economic resilience is reflected in the decline of its fiscal breakeven oil price, driving rating upgrades and positioning it for investment-grade status. With public debt set to fall and non-oil growth accelerating, the sultanate’s diversification efforts and Future Fund Oman initiatives are bearing fruit.”

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