Trade and economic ties between Oman and Iran have burgeoned in recent years, as both countries leverage their geographical proximity, historical ties and strong neighborly relations to boost commerce and support the diversification of their economies.
Of late, these ties have expanded in scope to include shipping and logistics, multimodal transportation, energy cooperation and tourism as well, Oman Observer wrote.
Data shared recently by the National Centre for Statistics and Information (NCSI) indicates that Omani exports to Iran have been expanding by leaps and bounds, although Oman-origin merchandise remains minuscule. It amounted to 207.4 million Omani rials ($538 million) in 2022, which included a barely discernible OMR4.2 million ($10.9 million) in Oman-origin goods. Nevertheless, the figures were a testament to a progressive uptick in trade between the two countries.
Reexports into Iran from Oman included machinery, devices and equipment for heat treatment, plates, sheets, tapes, diesel engine lubricants, optical tools, equipment for medical examination and electrical equipment.
Imports from Iran into Oman amounted to OMR113.4 million ($294 million) in 2022, compared to OMR98.7 million ($256 million) in 2021. They comprised mainly livestock and semi-finished products of iron steel and bitumen, as well as fruits and shrimp.
Significantly, it was during the recent pandemic that bilateral trade, notably in the area of foodstuff, livestock and farm produce, received a major boost between Oman and Iran when conventional modes of supply together with supply chains were disrupted in the wake of international lockdowns.
During this challenging period, Iran - with its abundance of fresh produce - became a practical and cost-competitive source of supply to the Omani market. Satellite ports along the Sea of Oman coast flourished in its wake, helping ensure that the food requirements of Oman were adequately met.
Since the start of 2023, both countries have exchanged high-level visits to set the ground for a significant uptick in trade and economic relations. Notable have been efforts to broaden transportation ties between the two neighbors for commercial and tourism purposes through various methods, including rail, road, air and maritime routes.
To this end, Oman's Minister of Transport, Communications and Information Technology Said bin Hamoud al Maawali led a delegation to Tehran to meet Iranian Minister of Roads and Urban Development Mehrdad Bazrpash earlier this month. Both sides explored the feasibility of a comprehensive maritime transport agreement envisioning direct shipping lines between the ports of Iran and Oman, particularly between Bandar Abbas and Shinas Port.
The two countries also discussed plans to facilitate trade through multimodal transit channels from Central Asia to Oman through Iran under the Ashgabat Agreement. Signed in 2011, the Ashgabat Agreement is a multimodal transport deal among Kazakhstan, Uzbekistan, Turkmenistan, Iran, India, Pakistan and Oman for creating an international transport and transit corridor to facilitate the transportation of goods between Central Asia and the Arabian Gulf. The agreement came into force in April 2016.
In order to boost trade and economic ties, Oman and Iran are eager to sign a landmark preferential trade agreement (PTA) against the backdrop of Sultan Haitham bin Tarik's historic visit to Tehran starting May 28, 2023. Helping pave the way for this groundbreaking pact was the recent visit of Omani Minister of Commerce, Industry and Investment Promotion Qais bin Mohammed al Yousef. This eagerness to ramp up trade and economic relations was also reflected in the attendance of around 200 Omani business leaders at the Iran Expo 2023.
Significantly, Oman's private sector has also committed to setting up a sales agency for Iran Khodro Industrial Group, makers of the Iran Khodro brand of vehicles, in the sultanate. The facility will support the export of the Iranian automotive brand into Oman and elsewhere in the (Persian) Gulf Cooperation Council states.
More than 1,300 wholly-owned Iranian businesses operate in Oman, which figure is expected to rise dramatically in the wake of the Omani Sultan's landmark visit to Tehran.
Sultan’s Visit to Enhance Trade, Investment Opportunities
Bilateral trade relations and investments will be key areas that will be in focus during the visit of Sultan Haitham bin Tarik to Iran, which begins on Sunday, Times of Oman wrote.
Businessmen and entrepreneurs of both the countries have welcomed the visit of the Omani Sultan and are hopeful that bilateral trade and investments in the public and private sectors will get a huge boost.
Leading business leaders said the visit would contribute to enhancement of trade and investment movement and increase the exchange of trade between the two countries.
Faisal bin Abdullah Al Rawas, chairman of Oman Chamber of Commerce and Industry (OCCI), said the private sector sees the visit of Oman’s Sultan to Iran with great interest, expecting priority to be given for the economic side in negotiations between the two sides.
“The Sultanate of Oman and the Islamic Republic of Iran share historical and deep-rooted relations, and the visit would facilitate the signing of new economic agreements between the two countries,” he added.
According to Al Rawas, OCCI, in cooperation with the Ministry of Commerce, Industry and Investment Promotion, has offered several facilities to foreign investors, mainly investors from Iran to boost maritime trade.
He said trade exchange between Oman and Iran increased by approximately $2 billion in 2021 and the number of Omani companies in which Iranian investors contribute has reached 1,800 companies.
Al Rawas said: “I expect the opening of economic dossiers during the visit and new agreements would contribute to the increase of trade between the two countries. The trade volume has doubled almost threefold in the last two years.”
The OCCI chief said visa-free entry for citizens of both the countries would contribute to enhancement of bilateral tourism ties.
Jamal Razzaqi, chairman of the Iranian side in the Omani-Iran Joint Business Council, hoped that the visit of Oman’s Sultan to Iran and his meetings with the Iranian leadership would achieve the goals of the people of the two countries.
“I hope the meetings between the two leaders would open more opportunities in the fields of trade, scientific and medical cooperation between the two countries,” he said.
“Iran aspires for increasing the size of exchange of trade with the Sultanate of Oman to $5 billion. This is possible, as there are great opportunities for trade between the two countries. Iran does not view the Sultanate of Oman as an economic market but as a vital strategic partner.”
According to Razzaqi, boosting joint investments and setting well-established mechanisms for accelerating the executive procedures for investment would achieve sustainability of trade relations.
“Joint investments and cooperation, currently witnessed by businessmen, are the result of strong relationship set by the governments of both the countries during the past years,” he said.
“The significance of the role of the private sector in both the countries and the necessity for continuation of communication and coordination between the Iran Chamber of Commerce, Industries, Mines and Agriculture, and the Oman Chamber of Commerce and Industry [OCCI] for the increase of trade exchange and investments between the Sultanate of Oman and the Islamic Republic of Iran.”
Ra’eid bin Mohammed Al Shahi, chairman of Musandam branch of OCCI, said the visit of Sultan Haitham bin Tarik to Iran reflects the historical relations between the two countries and will boost joint cooperation and exchange of trade and investments between the two countries.
Mohsen Zarrabi, former chairman of the Iran-Oman Chamber of Commerce, Industries, Mines and Agriculture, said economic cooperation is one of the results of strong relations between Oman and Iran.
“We hold great aspirations, mainly with the presence of economic agreements and vital border posts between the two countries. The Iran Chamber of Commerce, Industries, Mines and Agriculture supports Iranian and Omani companies in both countries and works to facilitate investments,” said Zarrabi.
