Economy, Business And Markets

Iran-Oman Trade Potential Remains Untapped

Iran-Oman Trade Potential Remains Untapped Iran-Oman Trade Potential Remains Untapped

The Islamic Republic of Iran and the Sultanate of Oman have close diplomatic relations. Muscat, which has always tried to take a neutral stance in the regional political arena, maintains good ties with all Persian Gulf countries including Iran. The sultanate has even played a crucial intermediary role in Iran's nuclear energy program, facilitating negotiations between Tehran and the western powers.

Meanwhile, economic relations between the two countries are not as satisfactory as the political ties. In October last year, Ibrahim Said Al Nabhani, the chairman of Oman's Chamber of Commerce and Industry, said the volume of Iran-Oman annual trade exchange was slightly over $240 million in 2014, according to IRNA.

To find out why the economic ties between the two countries are not as strong as the political relations, the Financial Tribune conducted an interview with Mohsen Zarrabi, the head of Iran-Oman Joint Chamber of Commerce, Industries, Mines, and Agriculture.

"One reason behind the unsatisfactory economic relations between the two countries has been the international sanctions against Iran," said Zarrabi, without elaborating.

He however noted that under similar circumstances, over $13 billion was recorded in trade volume between Iran and the United Arab Emirates (UAE), while the figure for Iran-Oman trade volume stood at about $600 million, majority of which was contributed by engineering services offered by few Iranian companies in Oman's construction and road sectors.     

Zarrabi predicted that Tehran-Muscat trade will grow in the next few years, pointing to the regional transportation corridor (agreed between Iran, Oman, Turkmenistan, and Uzbekistan last year to which Qatar was later added) and also the infrastructure Oman has created in the three ports of Sohar, Salaleh, and Duqm.

He further underlined the huge potential for expanding trade ties between the two neighbors arising from historical proximity between the two countries.

Noting that the chamber has been concentrating efforts on strengthening and developing economic ties between the two countries, Zarrabi said the chamber's board of directors has held numerous meetings over the past year with the Iranian ambassador to Oman, Ali Akbar Sibeveih and his Omani counterpart, Ahmed bin Khalid al-Barwani, as well as the Chairman of Oman Chamber of Commerce and Industry, Saeed Saleh Saeed al-Kiyumi to help boost trade.

The chamber's meetings finally resulted in the first exclusive exhibition of Iranian products and services in Muscat in January this year. According to Zarrabi, the exhibition was welcomed by the Omani business owners and commercial sectors, prompting the Oman Chamber of Commerce and Industry to send a delegation comprising of Omani traders and companies to Tehran in late April. As many as 60 high profile Omani business-owners as well as the heads of four major Omani banks are among the delegation that will travel to Tehran.

As part of their visit to Tehran, the managers of major Omani ports of Sohar, Salaleh, and Duqm will be demonstrating their ports' facilities to the Iranian shipping and commercial companies. Representatives from the Organization for Investment, and Economic and Technical Assistance of Iran will also take part in the meetings to elaborate the incentives offered by Iran to foreign investors, Zarrabi said.

He added that during the Omani delegation visit to Tehran on April 24-25, the Omani business owners and representatives will have a chance to hold business-to-business (B2B) meetings with the Iranian giant companies to find new avenues for expanding economic cooperation.

Zarrabi also underlined the need for the private sectors in both countries to establish a strong network so that the manufactures, financial institutions, and merchants can easily acquire information and identify business opportunities.

Omani companies have not been very active in Iran's business environment during the past few years, due to absence of information, according to Zarrabi. One of the few cases of Oman's participation in Iran's mining sector was in Mehdiabad zinc and lead mine in the central province of Yazd. The Omani-Australian company established a joint venture with the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) to develop the mine.

According to Zarrabi, medical tourism is a key sector for development of cooperation between the private sectors in Iran and Oman. "Omani nationals are eager to travel to Iran for medical treatment," he said, adding that an Iranian private company has purchased land in Muscat for building a hospital.