Oman Oil and Gas Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

Oman Oil and Gas Market Analysis

The Oman Oil And Gas Market size is estimated at USD 4.46 billion in 2025, and is expected to reach USD 5.03 billion by 2030, at a CAGR of 2.4% during the forecast period (2025-2030).

Oman's oil and gas sector continues to demonstrate robust growth, underpinned by significant resource reserves and strategic infrastructure developments. As of 2022, the country maintains substantial reserves of 5.2 billion barrels of crude oil and 24 trillion cubic feet of natural gas, positioning it as a key player in the Middle Eastern energy landscape. The sector has witnessed remarkable production growth, with natural gas output reaching 42.1 billion cubic meters in 2022, representing a 4.7% increase from the previous year, while refinery throughput achieved 262 thousand barrels per day, demonstrating the industry's operational efficiency and capacity utilization.

The country's export capabilities have strengthened considerably, with total crude oil exports growing by 10.6% to reach 319.5 million barrels in 2022. China remains the dominant export destination, accounting for 82% of Oman's crude oil exports, highlighting the strong bilateral energy trade relationship. In January 2023, Shell signed multiple partnership agreements with Oman's Ministry of Energy and Minerals, OQ, and Oman LNG in the fields of liquefied natural gas and hydrogen, demonstrating the country's commitment to diversifying its energy portfolio while maintaining its hydrocarbon strength.

Infrastructure development continues to be a priority, as evidenced by significant investments and partnerships. In February 2023, the Saudi Fund for Development committed USD 320 million for infrastructure development in Oman, particularly focusing on the Al-Dhahirah Special Economic Zone. This investment encompasses crucial developments in roads, water networks, and industrial facilities. Additionally, the announcement of the Ladayn Polymer Park in April 2023, aimed at manufacturing multi-purpose petroleum products in Suhar, demonstrates Oman's commitment to expanding its downstream capabilities.

The industry is experiencing a transformation through strategic partnerships and technological advancement. In December 2022, Oman's energy company OQ, Saudi Basic Industries Corporation (SABIC), and Kuwait Petroleum International (KPI) signed a joint development agreement to construct a petrochemical complex in the Special Economic Zone Duqm. This facility will feature a steam cracker, derivative units, and natural gas liquids extraction capabilities, representing a significant step in Oman's petrochemical sector development. The start of gas production from the Mabrouk field in January 2023, with expected output to reach more than 0.5 billion cubic feet per day by mid-2024, further exemplifies the country's commitment to expanding its production capabilities.

Oman Oil and Gas Market Trends

Increasing Natural Gas Production and Infrastructure

Oman's natural gas sector has witnessed substantial growth, supported by promising developments in several new projects. The country's robust production capabilities are evidenced by its achievement of 42.1 billion cubic meters of natural gas production in 2022, marking a significant 4.7% increase from the previous year. This growth trajectory is further strengthened by strategic partnerships and investments, as demonstrated by Shell's multiple partnership agreements signed in January 2023 with Oman's Ministry of Energy and Minerals, OQ, and Oman LNG in the fields of liquefied natural gas and hydrogen. These collaborations are instrumental in expanding the country's oil and gas infrastructure and production capabilities.

The development of LNG infrastructure has been particularly noteworthy, with Oman LNG announcing plans to expand its Qalhat facility from 11.5 million tons per annum to 12 million tons per annum by 2024-2025. This expansion is complemented by significant infrastructure projects such as the USD 5 billion undersea liquefied natural gas pipeline project announced by South Asia Gas Enterprise (SAGE) in May 2023, which will connect the Gulf region to India via Oman. Additionally, the country has secured several long-term supply agreements with Asian companies, including the December 2022 deal with Itochu Corporation, JERA, and Mitsui & Co for the supply of 2.35 mtpa starting from 2025 for a period of 10 years. The combination of increased production capacity and enhanced oil and gas infrastructure development positions Oman strongly in the global natural gas market.

Segment Analysis: Upstream

Onshore Segment in Oman Oil and Gas Market

The onshore oil and gas segment dominates Oman's oil and gas market, accounting for approximately 85% of the country's total upstream oil and gas activities in 2024. This segment's commanding position is evidenced by its extensive infrastructure, with 49 active drilling rigs operating across various onshore fields as of 2023. The segment's strength is further reinforced by major developments such as the Ministry of Energy and Minerals' announcement of new oil discoveries that would raise production by 50,000 to 100,000 barrels in the coming years. Key assets driving this segment include Block 6, Khazzan, Mukhaizna, Block 9, and several other productive fields. The segment has witnessed significant investment activities, exemplified by the USD 2 billion contract with Shell for drilling wells and connecting production lines in the Mabrouk North field. Additionally, the recent bid round for three oil and gas exploration areas (Blocks 15, 36, and 54) and TotalEnergies' agreement to upscale exploration and production activities in onshore Block 11 further demonstrate the segment's robust growth trajectory and continued dominance in Oman's hydrocarbon sector.

Offshore Segment in Oman Oil and Gas Market

The offshore oil and gas segment represents a developing frontier in Oman's oil and gas market, with significant potential for future growth. While currently in its nascent stages, the segment is witnessing increased exploration and development activities, particularly in key areas such as Block 50 off the east coast, Block 52 in the south, and Block 8 off Musandam. The Ministry of Energy and Minerals' preparation to offer new offshore oil and gas blocks by the end of 2023 signals the government's commitment to expanding this segment. The segment has shown promising developments through projects like the Yumna offshore field, which has already extracted over 7 million stock tank barrels of crude oil. The joint development agreement between Oman and Iran to develop the Hengam offshore oilfield in the Persian Gulf represents another significant step in expanding offshore operations. These developments, coupled with the government's strategic focus on offshore exploration, indicate the segment's growing importance in diversifying Oman's hydrocarbon production portfolio.

Segment Analysis: Midstream

LNG Terminal and Storage Segment in Oman Oil and Gas Midstream Market

The LNG Terminal and oil and gas storage segment dominates Oman's midstream oil and gas market, driven by the country's emergence as one of the top ten LNG exporters globally. The segment's prominence is reinforced by significant infrastructure developments, including the Oman LNG facilities near Sur with a capacity of 10.4 million tonnes per annum, and the Qalhat LNG complex which has seen its production capacity increase from 8.6 million tonnes to 11.5 million tonnes per year in 2022. The segment's strength is further evidenced by major long-term supply agreements signed with international players, including agreements with TotalEnergies and PTT for 1.6 million metric tonnes of LNG supply, and partnerships with Japanese firms Jera, Mitsui, and Itochu for a combined 2.35 million tons per year of LNG imports. The robust infrastructure network, including approximately 2,500 km of natural gas transmission systems operated by Oman Gas Company, underscores this segment's market leadership.

Crude Transportation Segment in Oman Oil and Gas Midstream Market

The oil and gas transportation segment is experiencing rapid growth in Oman's midstream oil and gas market, demonstrated by significant developments in transportation infrastructure and export capabilities. This growth is highlighted by the 18% increase in actual delivery volumes of Oman crude oil in the first quarter of 2023 through the Dubai Mercantile Exchange, reaching 63.77 million barrels. The segment's expansion is supported by strategic developments such as the framework agreement between Oman's Ministry of Energy and Minerals and Oman Tank Terminal Company to develop a new pipeline for crude oil exports from the Ras Markaz storage terminal. The growth trajectory is further strengthened by increasing private sector investments in port infrastructure, including the development of four terminals at the Port of Duqm for containers, general cargo, bulk goods, and liquids, as well as developments at ports in Khasab and Shinas.

Segment Analysis: Downstream

Refineries Segment in Oman Oil and Gas Market

The refineries segment maintains a dominant position in Oman's downstream oil and gas market, driven by significant infrastructure developments and increasing demand for petroleum products from the transportation sector. The segment's strength is evidenced by the country's refinery throughput of approximately 262 thousand barrels per day, supported by major operational facilities including the Mina Al Fahal Hydroskimming Refinery, Sohar Refinery, and the newly constructed Duqm Refinery. The segment's growth is further bolstered by the country's strategic focus on expanding its refining capabilities, with significant investments in modernization and capacity expansion projects. The development of new refining facilities and upgrades to existing infrastructure demonstrates Oman's commitment to strengthening its position as a key regional refining hub. The segment's robust performance is also supported by the country's high urbanization rate of 87%, which drives increased demand for petroleum products in the transportation and industrial sectors.

Petrochemicals Segment in Oman Oil and Gas Market

The petrochemicals segment is experiencing rapid growth in Oman's downstream oil and gas sector, driven by ambitious expansion plans and strategic investments in new production facilities. This growth trajectory is supported by major developments such as the Duqm Petrochemical Complex, a joint venture between OQ Refineries and Petroleum Industries, Saudi Arabia's SABIC, and Kuwait Petroleum International, which aims to significantly enhance the country's petrochemical production capabilities. The segment's expansion is further accelerated by the development of specialized facilities like the Ladayn Polymer Park, which is projected to produce approximately 150 kilotons of multi-use plastic products by 2030. The government's focus on diversifying the economy through petrochemical value chain development, coupled with increasing domestic and regional demand for petrochemical products in various industries including construction, packaging, and manufacturing, positions this segment for substantial growth in the forecast period 2024-2029.