S&P Affirms Oman Ratings At ‘BB-‘, Keeps Outlook Stable

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Author: Perez Clark

The Standard’s and Poor’s Global Rating agency has affirmed its “BB-” long-term foreign and local currency credit ratings on the sultanate of Oman. Thanks to recent reform measures, the nation has decreased its public debt-to-GDP ratio to 63%, down from 45% in 2022 and 2021.

S&P Affirms Oman Ratings At ‘BB-‘, Keeps Outlook Stable

International rating agency S&P (Standard and Poor’s Services) has declared the credit rating of the sultanate of Oman at (BB-) with a steady outlook, attributing economic and financial initiatives, sustainability measures, and improving oil prices.

According to the report released on Friday, S&P expects the financial initiatives employed by the Omani government in the structure of its medium-term fiscal plan and the favorable improvement in crude oil prices to aid in reinforcing the financial status of the Sultanate of Oman in the current and following years.

S&P Global analysts expect oil prices to scale to an average of $100 per barrel for the rest of the current year and $85 per barrel through 2023. It anticipates that such terms of trade will strengthen Oman’s fiscal policies and balance of payment in 2023.

“We observe that the Omani government uses windfall revenue to alleviate debt. During the first half of 2022, the nation participated in several liability management measures, such as the buyback of over $500 million in Eurobonds. 

We project government debt to decline to RO18.5Bn by the end of the year, from RO20.8Bn at the end of 2021,” S&P said.

However, the government of Oman continues to decrease its dependence on oil receipts and improve fiscal sustainability in tandem with the country’s medium-term financial plan for 2025.

The steady outlook balances the current growth in the country’s fiscal and balance-of-payments stance against its economic susceptibility to oil price shocks during this period of intense economic uncertainties happening in all nations of the world.  

Beyond Oman’s favorable terms of trade, S&P expects oil prices to drop over the 2023-2024 fiscal year, signaling a decline in the nation’s external and fiscal year performance.

The report predicts oil prices to devalue from 2024 to an estimated $55 per barrel annually, stressing that the drop in crude oil prices will cause heavy burdens on the country’s public finances. S&P warns the government of Oman to bear this in mind when formulating its forthcoming policies and procedures.

S&P forecasts that Oman could improve its ratings over the next year if it continues to take reform measures to strengthen the nation’s financial position. 

For example, quicker deleveraging in the state-controlled business sector or higher foreign currency reserves will help foster growth and a positive credit rating action.


S&P predicts higher production output and oil prices, along with public investment expenses to play crucial roles in the Sultanate of Oman’s economic boost.

While hydrocarbon production will drive economic growth during the current fiscal year and its subsequent year, S&P expects economic progress in the outer years of this forecast period to be mainly characterized by the growth of Oman’s non-oil sectors.

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