The China-Oman Economic Relationship
China has become Oman’s most important economic partner — the largest buyer of Omani crude oil, a major investor in infrastructure, and an increasingly present player in Duqm’s industrial development.
Trade: Oman exports approximately 60-70% of its crude oil to China — making China’s demand the primary driver of Oman’s hydrocarbon revenues. This concentration creates structural revenue dependency.
Investment: Chinese state-owned enterprises and investment vehicles have invested in:
- Oman-China Industrial Park at Duqm (established 2016, multiple industrial investors)
- Infrastructure projects across Oman
- Potential future investment in green hydrogen supply chains
Diplomatic: Oman participates in China’s Belt and Road Initiative (BRI) — Oman was an early BRI partner, with Duqm positioned as a BRI logistics node connecting Chinese industrial capacity to Indian Ocean trade routes.
The Duqm China Connection
The Oman-China Industrial Park in Duqm is one of the most concrete bilateral investment manifestations — Chinese industrial companies producing goods for Gulf and African markets from a duty-free zone with Duqm’s port access. This provides genuine FDI inflows and industrial activity, though the park’s scale has been slower to develop than originally planned.
Strategic Implications
Crude export concentration risk: Oman’s heavy reliance on Chinese buyers creates vulnerability to Chinese demand shifts — whether from energy transition reducing Chinese oil demand or from geopolitical disruptions to the trade relationship.
BRI dependency concerns: Gulf states, including Oman, must balance the economic benefits of Chinese investment with Western concerns about BRI strategic intent. Oman’s US FTA creates a specific bilateral dimension to this balance.
Green hydrogen opportunity: China is investing heavily in green hydrogen technology and may become a major off-take buyer for Omani green hydrogen — creating a new dimension to the relationship beyond hydrocarbons.