The visit of Sultan Haitham bin Tariq to Saudi Arabia was a surprising sign of the importance of Oman’s relations with the GCC countries. However, Oman has taken a neutral stance on most of the crises in the region, especially on the ongoing tensions with Iran, which affect most of the GCC countries; But it has always prioritized political and economic relations with its Arab neighbors. Establishing close relations between Oman and Saudi Arabia, which is trying to keep its economy away from oil, is an important opportunity for Saudi Arabia.
Saudi Arabia’s proximity to Oman comes as Saudi Crown Prince Mohammed bin Salman seeks to establish strategic ties with governments that have a different approach to Iran. In this regard, Saudi Arabia has established closer relations with Iraq and in March 2021 hosted the Prime Minister of this country. This year, it signed a reconciliation agreement with Qatar, its neighbor that has been severed since 2017.
Muhammad ibn Salman thinks differently about regional issues. He is more interested in establishing a multilateral relationship centered on the Gulf Cooperation Council, which does not rely solely on an ally that was formerly the United Arab Emirates; Rather, in bin Salman’s view, the new policy is based on a broader network of alliances that pursues Saudi interests.
Oman’s economic challenges
Economic and financial challenges facing the Kingdom of Oman have doubled the importance of economic relations with the GCC countries; Because Oman’s need to attract foreign investment, strengthen the private sector to create jobs, solve financial problems, receive loans, strengthen economic cooperation with the Persian Gulf countries such as Saudi Arabia, Qatar and the United Arab Emirates is important for achieving stability.
The increase in Omani government debt from 5% to 80% between 2014 and 2020 posed a major challenge for Muscat; These problems were exacerbated by the Corona epidemic. The visit of the King of Oman took place a few weeks after the formation of the youth protest against the unemployment situation in the city of “Sohar” in Oman, in response to which the Omani government promised to increase job opportunities in the public sector; But Omani officials are well aware that this approach will not be the answer in the long run, and that the country needs private sector activity and domestic and foreign investment to reduce its reliance on the public sector and diversify its revenues.
Propose the creation of a joint oil transmission pipeline
In this regard, the possibility of reviving the Bandar al-Daqam oil pipeline will be an important issue for cooperation between the two sides. The idea for the project came during the Iran-Iraq War, when the GCC countries were looking for a safe way to export their oil away from tensions in the Persian Gulf, and now tensions with the Houthis have doubled the need to revive the pipeline. This port overlooks the Arabian Sea and is located along the southern coast of Oman and far from the points of tension in the Persian Gulf and the Red Sea.
The development of Al-Daqam port, with its rich fishing resources in the region and the construction of an industrial town in which the Saudis have invested $ 210 million in 2018, is set to attract foreign investors and turn the port into a shipping hub. The development of this port is important for the Saudis, whose goal is to diversify Saudi Arabia’s revenues and strengthen relations with Oman, which are considered neutral in terms of political tensions.
Also, with the development of this port, investment and trade between Oman and Saudi Arabia will increase, and if built, 500 miles (800 km) of sea voyage distance between the two countries will be created, which in addition to increasing the volume of bilateral trade, Oman trade with other countries. Which will be connected to Muscat via Saudi Arabia.
The importance of Oman as a mediating country.
Oman’s neutral position in the region and its willingness to engage with Iran during the Iran-Saudi tensions angered Riyadh and discouraged Saudi Arabia from continuing to invest in Oman; But Joe Biden’s rise to the presidency in the United States and Riyadh’s shaky efforts to save itself from the Yemeni quagmire doubled the importance of Oman’s friendly relations with Iran and the Houthis to the Saudis being able to adapt to these new changes and exit crises.
On the other hand, Oman, in addition to Iraq, can be a center for dialogue and mediation between Riyadh and Tehran. If the Saudi-Iranian talks in Baghdad do not end politically, Oman will be a natural environment for further talks; Because Oman has historically proven to be a successful mediator in other regional conflicts. Oman, on the other hand, is currently playing a key role in mediating between Saudi Arabia and the Houthis, Iran’s closest allies in Yemen, which will increase Saudi Arabia’s desire for stronger ties.
