Is Oman Running Out of Oil?
Short Answer
Oman is not imminently running out of oil, but its reserves are finite and smaller than those of its Gulf neighbours. Proven reserves are sufficient for approximately fifteen to twenty years at current production rates, making economic diversification an urgent national priority rather than a long-term aspiration.
Detailed Answer
Oman’s proven crude oil reserves are estimated at approximately five billion barrels, considerably less than Saudi Arabia, Iraq, Kuwait, or the United Arab Emirates. At current production rates of roughly one million barrels per day, simple reserve-to-production ratio calculations suggest reserves could be exhausted within two decades, though this metric oversimplifies the situation.
Several factors extend the productive life of Oman’s oil sector. Continued exploration has occasionally added new reserves, and enhanced oil recovery technologies are unlocking crude from reservoirs previously considered uneconomic. Heavy oil and tight oil resources represent potential future production but require significant capital investment and higher break-even prices.
Natural gas reserves provide a complementary resource with a longer horizon. Gas is used domestically for power generation, desalination, and industrial feedstock, as well as for export as LNG. The gas sector is expected to play a bridging role as the economy transitions away from oil dependence.
The finite nature of Oman’s hydrocarbon endowment is precisely what makes Vision 2040 and economic diversification so critical. Unlike wealthier Gulf states that can count on decades of additional oil production, Oman faces a more immediate imperative to develop alternative revenue streams and employment sources.