Overview
Oman’s energy transition involves balancing continued reliance on fossil fuels, which drive export revenues, with growing investment in renewable energy to meet domestic demand and environmental commitments. This comparison examines both sides of the energy equation.
Renewable Energy in Oman
Renewable energy in Oman is at an early but rapidly growing stage. The Ibri II solar plant (500 MW) and Dhofar Wind Farm (50 MW) are operational, with several gigawatts of additional solar capacity planned. Oman targets 30 percent of electricity from renewables by 2030. Green hydrogen projects at Duqm represent a major opportunity. Renewable energy investment is driven by cost competitiveness, climate commitments, and the desire to free up gas for export or petrochemical use.
Fossil Energy in Oman
Fossil energy remains the backbone of Oman’s economy. Oil production averages approximately one million barrels per day, and natural gas production supports domestic power generation, industrial use, and LNG exports. Fossil fuel exports account for the majority of government revenue. The sector employs thousands directly and supports extensive supply chains. Enhanced oil recovery techniques are extending the productive life of mature fields.
Key Differences
Fossil fuels generate export revenue that renewables currently cannot replace. Renewables are increasingly cost-competitive for domestic electricity generation, freeing gas for higher-value uses. Fossil fuel production is mature with declining reserves, while renewable potential is largely untapped. The energy transition creates new industrial opportunities in green hydrogen and solar manufacturing.
Verdict / Bottom Line
Oman’s energy transition is not about abandoning fossil fuels immediately but about strategically building renewable capacity while maximising remaining fossil fuel value. Using renewables for domestic electricity generation and redirecting gas to petrochemicals and export represents an intelligent transition strategy that serves both economic and environmental objectives.