The Middle East business landscape continues to evolve at pace. Oman’s economy grew 5.1% year-on-year in the second quarter of 2026, driven by a sharp expansion in petroleum activities, according to preliminary data from the National Centre for Statistics and Information (NCSI). The latest figures highlight the region’s increasing strategic importance.
Why this matters for the region
Gross domestic product at constant prices reached approximately $25.8 billion (OMR 9.9 billion) in the second quarter, up from $24.5 billion (OMR 9.4 billion) in the same period of 2025. Petroleum activities led the expansion, growing 14.7% year-on-year to around $8.9 billion, while non-petroleum activities recorded more modest growth of 0.7% to approximately $18.2 billion.
The scale of the upturn matters for the wider Gulf. Oman has long pursued a diversification agenda, yet the strength of its hydrocarbon sector is once again carrying the headline growth number, reinforcing the importance of oil revenues to regional economies.
Market dynamics at play
Within the non-petroleum economy, services expanded 1.5% year-on-year to approximately $11.9 billion, and agriculture and fishing grew 2.3% to $846.6 million. Industrial activities, however, contracted 1.5% to around $4.9 billion, underlining the uneven nature of the recovery.
The credit backdrop is similarly supportive. S&P Global Ratings has affirmed Oman’s long-term sovereign rating at ‘BBB-‘ with a stable outlook, and raised its 2026 real GDP growth forecast to 3.5% from 1.6%, citing continued improvements in the country’s fiscal and external positions.
Regional responses and reactions
On public finances, S&P expects Oman to record a fiscal surplus of about 4.8% of GDP in 2026, followed by a surplus of around 2.2% in 2027, with government debt projected to reach 30.2% of GDP by the end of 2026.
Trade infrastructure is also gaining momentum. Cargo volumes at the ports of Salalah and Sohar rose 15% and 52% respectively in the first half of the year, supporting the Sultanate’s logistics ambitions and its broader diversification strategy.
The road ahead for Gulf businesses
Oman’s external position is expected to remain in surplus, with S&P forecasting a current-account surplus of about 3.5% of GDP in 2026. Foreign-exchange reserves stood at approximately $18.9 billion at the end of July, according to the Central Bank of Oman’s latest statistical bulletin.
For businesses watching the region, the coming months will reveal whether non-oil activity can build on its steady gains. The future outlook for the Sultanate appears positive, with sustained oil revenues and expanding hydrocarbon supply underpinning the growth story.
Source: www.forbesmiddleeast.com