This is a best prospect industry sector for this country. Includes a market overview and trade data.
The Sultanate’s Oman Logistics Strategy lays out long-term objectives for increasing the contribution of the logistics sector to GDP. Oman’s strategic objectives over the past several years have focused on easing congestion and enhancing capacity by investing in infrastructure and technology for new ports and road links, as well as expanded routes for national airline carriers. Oman aspires to leverage its deep-water ports on the Gulf of Oman and the Indian Ocean to become one of the world’s top ten logistics hubs by 2040.
Omani ports are connected with 86 ports in 40 countries. The strategic port town of Duqm, located halfway between Muscat and Salalah on the Indian Ocean, is Oman’s flagship development project. Duqm will eventually include a new port; naval base; dry dock; fisheries hub; industrial free zone; hotels; power and desalination plants; a refinery; a 250-kilometer pipeline network from interior oil fields; liquid jetty; and an oil tank storage terminal. The government also aspires to build a rail line to facilitate the transfer of mineral resources from the Shweimiyah area in Oman’s Dhofar governorate to the port.
Road construction is another major focus of domestic and regional development. The government opened more than 100 miles of roadways along the Sharqiya Expressway in 2020 connecting the city of Bidbid, near Muscat, with the governorates along Oman’s coastline. The government plans to open a new road through the Empty Quarter connecting Riyadh with Muscat and other major Omani cities, including Duqm and other Omani ports. Oman has an ongoing drive to improve its public transport infrastructure through the expansion of its bus system and private taxi services. Khazaen Economic City, a 20-square mile logistics-led development outside Muscat, will feature an automobile market, according to current planning. The government is also considering privatizing the national bus and ferry networks.
In April 2021, the Sultanate’s flag carrier, Oman Air, entered into a codeshare agreement with Qatar Airways which includes Qatar Airways’ direct flights to the United States as part of a general strategy to expand routes and designations. Oman’s first budget airline, Salam Air, launched operations in 2016 and has expanded its regional routes. With reduced business due to the COVID-19 pandemic, these carriers are likely to focus on cost optimization initiatives in the short term. The new Muscat International Airport opened in March 2018. Duqm Airport’s passenger terminal opened in September 2018 and the airport hopes to add regional and international routes in the future.
Government restructuring saw the transfer of transport and road responsibilities to the new Ministry of Transport, Communications and Information Technology in 2020. It also moved government agency Asyad, which focuses on port, free zone, shipping, dry-dock, and e-commerce services under the Oman Investment Authority. In light of tightened budgets, the government anticipates a larger role for the private sector in the future, not only in providing capital, but also in tie-ups with the public sector to help manage state assets.
Oman imports vehicles for domestic sales and for re-exports to regional markets. In addition to a continuing market for passenger vehicles, Oman is importing construction, airport, and port equipment including buses, aircraft, X-ray security screening equipment, cranes, rubber tire gantries, port access control and security solutions, logistics software, and engineering, project management, and consultancy services.
Oman’s strategic location on the Strait of Hormuz, as well as its deep-water ports on the Gulf of Oman and Indian Ocean outside of the Strait, are main selling points as its logistics infrastructure grows and connectivity improves. The short-term challenge will be financing amid budget constraints and oil price uncertainty. Many large infrastructure projects are currently on hold or delayed.
The Special Economic Zone Authority for Duqm and the Port of Duqm are actively seeking foreign investment to help finance development. In addition to the massive array of construction projects, Duqm requires infrastructure development in sewage treatment, drainage, water desalination, power plants, buildings, telecommunication services, and landscaping. In June 2021, the Port of Duqm floated a public tender to select a terminal operator for its new container terminal. In July 2021, Asyad built its first new ship at Duqm’s dry dock, which also provides ship repair and maintenance services. Saudi Arabia is considering establishing an industrial zone in Duqm. The Duqm refinery project offers transportation and logistics opportunities. Oman’s two established ports in Sohar and Salalah also present significant opportunities. Sohar’s free zone has been at the forefront of Oman’s downstream manufacturing growth. The industrial zone is seeking to attract additional manufacturing companies to establish facilities or distribution centers. Sohar also hosts Oman’s largest operating oil refinery.
Salalah is in a prime location at the crossroads of East-West shipping, with weekly connections to and from the U.S. East Coast. Its port has a container terminal with seven berths of up to 18 meters’ draft and a general cargo terminal of 12 berths of up to 16 meters’ draft, with infrastructure to handle the world’s largest container vessels, as well as bulk cargo, bunkering and warehousing.
Oman is increasingly looking to the private sector for investment and expertise, particularly to develop its projects pipeline through joint ventures or PPPs. The government will also rely on PPPs to run the four terminals for containers, general cargo, bulk goods, and liquids at Port of Duqm; and in the developments of ports at Khasab and Shinas in the north. The government seeks to transform Port Sultan Qaboos into a mixed-use waterfront cruise and leisure destination under a PPP model.
- Ministry of Transport, Communications and Information Technology
- Port of Salalah
- Port of Duqm
- Sohar Port and Freezone