Overview

The Sultanate of Oman is the oldest independent state in the Arab World. Although partially under Portuguese occupation during the 16th to mid-17th century, Oman had its own empire in East Africa from the early 18th to the mid-19th century. It is bordered by Saudi Arabia on the western side, the United Arab Emirates (UAE) in the northwest and Yemen in the southwest. Oman has two enclaves (Madha and the Musandam peninsula) within the land borders of the UAE. Oman has maritime borders with Iran and Pakistan. The Arabian Sea lies to Oman's southeast, and the Gulf of Oman to the northeast. Oman's capital is Muscat, located on its northern coast.

Oman has a population of 4.6 million (2023). Foreign expatriates are estimated to make up to 40 per cent of the population. Administratively, Oman is divided into six regions. Its national day, 18 November, is the birthday of the former Sultan, His Majesty Qaboos bin Said Al-Said. 

Political overview

Oman is an absolute monarchy. The head of state and government (President) and the Supreme Commander of the Armed Forces is the Sultan. The Sultan, HM Haitham bin Tarik Al-Said acceded to the position in January 2020, following the death of the former Sultan, Sultan Qaboos, after an almost 50-year reign. Oman's succession laws afford the Sultan's oldest son, HM Theyazin bin Haitham, as the Crown Prince of Oman.

Established in 1996, Oman has a bicameral legislature with advisory powers, known as the Council of Oman. It comprises an 83-member upper chamber, the Majilis al Dawla (State Council) appointed by the Sultan, and an 84-member lower chamber, the Majilis al Shura (Consultative Council) elected by popular vote to serve a four-year term. The most recent election was held in October 2023. Universal suffrage for those over 21 in Oman was instituted on 4 October 2003. Legislation was amended in February 2010 to allow the formation of labour unions.

Omani citizens are roughly 55% of the population, the majority being Ibadi Muslims with a small Shia Muslim minority. As with other Gulf countries, Oman has a large youth population (approximately 45 per cent are under the age of 24).

Oman is a member of the United Nations, World Trade Organization, Arab League, Organisation of Islamic Cooperation (OIC), Gulf Cooperation Council (GCC) and the Indian Ocean Rim Association (IORA). Oman is an observer to the Organization of the Petroleum Exporting Countries (OPEC).

Bilateral relations

Our bilateral relations with Oman are friendly and cooperative. Australia established diplomatic relations with Oman in 1981. The Australian Embassy in Riyadh, Kingdom of Saudi Arabia, is accredited to Oman. Australia appointed an Honorary Consul in Muscat in December 2011. Oman opened an embassy in Canberra in January 2024.

As co-founders of the Indian Ocean Rim Association (IORA), Australia and Oman work closely together to advance cooperation on a range of Indian Ocean rim regional issues, including fisheries and maritime security and safety. In October 2022, Prime Minister Anthony Albanese switched on a 9,800-kilometre subsea cable linking Oman to Western Australia (WA). The Oman-Australia Cable enabled direct high-speed data connectivity from both the east and west coasts of Australia to the Middle East and Europe for the first time.

Education links remain strong, with 208 Omani student enrolments at Australian institutions in 2023). There are eight formal agreements between Australian and Omani universities to facilitate student and academic exchange, and research collaboration. This includes the establishment in 2003 of the Sultan of Oman Endowed Chair in Arab and Islamic Studies, which was established at the University of Melbourne, by the then Sultan of Oman, as a lasting token of the partnership between Oman and Australia.

People-to-people links are further enhanced by an association of alumni of Australian universities which is active in Oman, the Oman students' association in Melbourne, and the Australian Business Group in Oman.

Economic overview

Oman is a middle-income economy (GDP of USD $99.24 billion in 2023). Oil has been the key driver of the Omani economy since production began in 1967, making up about 70% of the Omani Government’s budget. 

Faced with the prospect of dwindling oil reserves, notwithstanding new gas coming on stream, the Omani Government has pursued an economic reform agenda to diversify its economy. A key pillar of Vision 2040 is to increase the contribution of non-oil sectors of the economy to 90 per cent of GDP. It is investing in green hydrogen through establishment of a solar and wind farm to power hydrogen production from water. Oman has set a goal of producing more than 1 million tonnes of clean ‘green’ hydrogen annually by 2030.

The Omani Government is also seeking to attract more foreign business and investment. In February 2022, the Omani Government met with representatives of Fortescue Future Industries, who expressed interest in developing a US$10 billion, 30GW green hydrogen project in the country.

Up to a billion dollars have been committed to the development of new maritime ports and the expansion of existing gateways. A new international airport in Muscat opened in 2018, with the capacity to handle 12 million passengers annually. Development of a Special Economic Zone at the port of Duqm is intended to create a major logistics hub for the region.

With an extensive Indian Ocean coastline, Oman has historically looked outward to the Indian Ocean, South Asia and East Africa. Oman aims to become a gateway to international trade between Europe, the Gulf and South Asia.

Trade and investment

Australia's two-way goods and services trade with Oman totalled AUD $828 million in 2023. Australia's principal exports include aluminium ores, meat, wheat and barley and totalled AUD $617 million in 2023. In 2023, imports from Oman to Australia were worth AUD $211 million and comprised largely of fertilisers, petroleum and associated commodities.

A number of Australian companies are active in Oman across a range of sectors. Oman is encouraging Australian investment to support its economic reform agenda, aimed at diversification of the economy and the education of its citizens. It has an interest in tapping into Australia's agribusiness and natural resources-related expertise, including on dairy production. Atyab Investments, the investment arm of Oman Flour Mills, announced in April 2022 it had established an Australian company to invest in the agricultural sector as part of the Omani government's emphasis on food security.

There is potential for useful scientific collaboration on agriculture, aquaculture and coastal ecosystems. There are significant prospects for further expansion in Australian education services, including in vocational education and training (VET).

High level visits

• August 2022: Visit to Australia by Oman's Foreign Minister, H.E. Sayyid Badr bin Hamad bin Hamood Albusaidi including meeting with Assistant Minister for Foreign Affairs, The Hon Tim Watts MP.
• July 2022: Visit to Oman by WA Minister for Culture and the Arts; Sport and Recreation; International Education; Heritage, the Hon David Templeman MLA.
• December 2016: Australian Special Envoy for Human Rights visited Oman.
• September 2015: The Hon Steven Ciobo, then Parliamentary Secretary for Foreign Affairs, Trade and Investment visited Oman.
• April 2015: The Speaker and a delegation of Members of the WA Legislative Assembly visited Oman.