Oman's oil output to rise nearly 20% by 2025: S&P Global Ratings

Oman, the largest Middle East oil producer outside OPEC, is forecast to boost its oil production to 1.135 million b/d by 2025, an 18.6% increase from 2021, as the OPEC+ group continues to relax curbs on its collective output, S&P Global Ratings said in a report.

Oman's oil output will reach 1.040 million b/d in 2022, up from an estimated 957,000 b/d in 2021, the ratings agency said in an April 1 report.

Although Oman is not an OPEC member, it is part of the broader OPEC+ alliance, which has been gradually unwinding historical output cuts that were initiated in 2020 as the pandemic crippled economies and destroyed crude demand.

Oman's economy is set to benefit from higher oil prices and expand 3.9% in 2022, up from an estimated 2.1% in 2021, S&P Global Ratings said.

"Following high fiscal and external pressures since 2015 that culminated in 2020 with the double shock from the COVID-19 pandemic and sharp fall in oil prices, we now expect Oman to benefit from higher oil prices and the government's ongoing reforms," the ratings agency said. "Higher oil prices and production, about 90% double-dose vaccination rates for those 18 years and above, removal of pandemic-related measures, and public investment spending will drive stronger growth this year."

Oman is expected to enjoy higher oil revenue because it has based its 2022 budget on a "conservative" oil price of $50/b, the agency said.

S&P Global Ratings in February raised its Brent oil price assumptions to $85/b from $60/b for 2022 and to $70/b from $55/b for 2023.