Options on the Table
By TBY | Oman | Jan 30, 2014
In 2006, during the Bush Administration, a bilateral trade agreement was signed between Oman and the US to open up trade between the two countries, which had a value of […]
In 2006, during the Bush Administration, a bilateral trade agreement was signed between Oman and the US to open up trade between the two countries, which had a value of around $1.2 billion; this came in the wake of Oman’s 2005 trade deficit of $15.7 million. Following the agreement, bilateral trade grew to $1.7 billion with a higher trade surplus of $80 million for Oman. On the strength of the FTA, the trade balance stood at $2.1 billion at the end of 2009 with an Omani deficit of $218 million. This figure remained steady through 2010 until 2011 when the US began importing more from Oman and bilateral trade hit $3.6 billion with a surplus for Oman of $774 million. However, in 2012, the US began to increase its own domestic production of shale gas and oil and Oman registered lower exports, and the US import increase switched the surplus to a $392 million deficit as total trade declined to around $3 billion. As of August 2013, a similar trading partner was shaping out, with two-way trade at $1.8 billion and Oman recording a $297 million deficit.
As the US continues to increase its domestic production of shale oil and gas, exports from Oman are likely to fall; however, if the Sultanate is able to diversify its economy adequately and move up the value chain to create more value-added products, it may be able to claw back some of the deficit.