Beyond Oil: Accelerating Export Diversification for Sustainable Growth - Oman

Selected Issues Papers, February 5, 2026

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Since oil was discovered in the 1960s, Oman’s economy and living standards have improved significantly.
The economy remains vulnerable: economic growth and external and fiscal balances are highly sensitive to oil price swings.
Objective: analyze barriers to export diversification and identify policy levers to build a competitive nonhydrocarbon export sector and strengthen economic resilience to oil price volatility.

Nonhydrocarbon output is composed primarily of non-tradables and low-added value sectors that:
- Rely on low-skilled labor.
- Offer limited productivity gains.
- Generate limited foreign currency receipts.
- Have limited employment potential for diversified, high-value growth.
Current diversification efforts have established important groundwork, but further progress is needed to achieve meaningful export diversification beyond oil and gas.
Empirical analysis indicates that improvements in government effectiveness and logistics performance could significantly raise nonhydrocarbon exports.

Accelerate structural reforms to:
- Improve product sophistication of nonhydrocarbon sectors.
- Deepen export diversification beyond oil and gas.
Combine reforms with well-targeted state support to:
- Enhance competitiveness of tradable nonhydrocarbon sectors.
- Foster productivity gains and higher-value foreign currency–earning exports.
Prioritize measurable improvements in:
- Government effectiveness.
- Logistics performance.

Source: Beyond Oil: Accelerating Export Diversification for Sustainable Growth - Oman (Selected Issues Papers, February 5, 2026).