Market Overview
Oman’s sovereign credit ratings have stabilised following the fiscal reforms initiated under the Medium-Term Fiscal Plan (2020-2024). As of early 2025, the Sultanate is rated BB+ by S&P, Ba2 by Moody’s, and BB+ by Fitch, all with stable outlooks reflecting improved fiscal metrics and sustained reform commitment.
The trajectory toward investment-grade status remains a key focus for policymakers and investors.
Opportunity Assessment
Rating upgrades represent a potential catalyst for significant spread compression across Omani sovereign and corporate debt. Each notch upgrade has historically delivered 50-75bps of spread tightening. The government’s fiscal breakeven oil price has fallen from $87/barrel in 2020 to $68/barrel in 2024.
| Metric | Value |
|---|---|
| S&P rating | BB+ (Stable) |
| Moody’s rating | Ba2 (Stable) |
| Fitch rating | BB+ (Stable) |
| Fiscal breakeven oil price | $68/barrel |
| Debt-to-GDP ratio | 38% (2024) |
| Foreign reserves | OMR 7.2 billion |
Risk Factors
Oil price volatility remains the primary credit risk factor. Contingent liabilities from state-owned enterprises create fiscal uncertainty. Structural reform pace may slow ahead of rating upgrade thresholds.
Entry Strategy
Long-dated Omani sovereign Eurobonds offer asymmetric upside from rating upgrades. Credit default swap positions provide leveraged exposure to spread movements. Corporate bonds from quasi-sovereign entities offer additional yield pickup.
Vision 2040 Alignment
Fiscal sustainability is a central Vision 2040 objective, with explicit targets for debt-to-GDP reduction, revenue diversification, and state enterprise reform that directly influence rating agency assessments.