Oman: Oman’s nominal gross domestic product registered an annual 2.8 percent drop thanks to an output decrease from the hydrocarbon sector, according to the latest figures.

Citing data from the National Center for Statistics and Information, the country’s central bank reported that the oil sector saw an 11.9 decrease in volume produced in the final three months of 2023 compared to the same period last year. 

This trend continued into 2024, with the average daily oil production rate standing at 1 million barrels in February, a 5.9 percent decrease from the previous year. 

The Omani oil average price at the end of February amounted to $80.2 per barrel, a 2 percent decline from its early 2023 position.

This comes after Oman and other member nations of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, agreed in March to extend their voluntary oil production costs through the second quarter of 2024 as part of the bloc’s strategy to stabilize the oil market and prices by reducing supply. 

Oman extended its additional voluntary cut of 42,000 barrels per day of crude oil until the end of June.

In a report published in the wake of that decision, S&P Global Ratings noted that this will lead to the nation experiencing low economic growth in 2024 of about 1.4 percent. 

“We expect hydrocarbon sector output to remain broadly flat in 2024, with the decline in oil production offset by an increase in condensate and gas production. A probable increase in hydrocarbon production should stimulate growth in 2025 and 2026,” S&P said as it revised Oman’s outlook from stable to positive.

As a testament to the positive outlook, the nation’s real GDP increased by 1.3 percent during the same period as the nominal GDP, with the non-hydrocarbon sector contributing 2.4 percent and the hydrocarbon sector contributing 2.4 percent. 

Similarly, S&P forecasts that Oman’s non-hydrocarbon economy will expand by about 2 percent in 2024. 

It also noted that credit conditions in Oman remain accommodative, and this should help support non-hydrocarbon sector growth in 2024, as it did in 2023.

The central bank’s statement also noted that total outstanding credit extended by other depository corporations, known as ODCs, which consist of conventional and Islamic banks in Oman, grew by 2.7 percent to 30.6 billion Omani rials ($79.49 billion) at the end of February 2024.