Oman posts $1.7 bln budget surplus in first half of 2023 based on moderate oil price

Oman posted a budget surplus of $1.71 billion (656 million rials) at the end of the first half of 2023, compared with 784 million rials in the same period in 2022, the state news agency reported on Sunday.

Oman has approved a 2023 budget with a deficit of 1.3 billion rials, or 3 percent of GDP, after posting a surplus of nearly $3 billion last year.

Gulf oil producers last year benefited from a sharp rise in oil prices, which surged past $100 a barrel after Russia’s invasion of Ukraine exacerbated concerns about disruptions to global energy supply.

The budget for this year is based on an average oil price of $55 a barrel. The 2022 budget was based on an oil price assumption of $50 a barrel, but the government later estimated prices averaged $94 a barrel last year.

Oil prices have come off a high of nearly $124 last year, though production cuts by Saudi-led OPEC and its Russia-led allies have helped prices notch their seventh consecutive weekly gain. Brent crude was trading at $86.81 a barrel on Sunday.

Along with Bahrain, Oman is one of the most heavily indebted of the oil- and gas-exporting Gulf countries relative to its size, though it has been paying down some of its debt.

Moody’s upgraded Oman’s rating to Ba2 in May and maintained a positive outlook, citing stronger fiscal metrics. Also earlier this year, Fitch and S&P both revised their outlooks on Oman’s BB rating to positive from stable.