Oman’s Port Strategy – LobeLog
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Within the Arabian Peninsula, Duqm and Salalah have much potential to further shape geopolitical relations amid strategic shifts in the regional balance of power. Any major investments by Saudi Arabia and the United Arab Emirates (UAE) in Duqm (and other Omani projects) should be watched closely for their effect on intra-Gulf politics. Some analysts contend that both countries are attempting to restrict the Sultanate’s geopolitical maneuverability as Muscat and Tehran try to maintain cooperative relations. As Riyadh and Abu Dhabi may use their petro-dollars to influence Oman’s future position in an increasingly polarized Gulf, they could use investments in Omani infrastructure projects as another way to gain leverage. Likewise, Oman’s trade infrastructure proved highly useful to Qatar last year when Doha needed alternatives to Jebel Ali as a logistics hub linking the emirate to the global economy.
It goes without saying that Iran itself is a key factor in this equation. If tensions in the Strait of Hormuz escalate, Duqm and Salalah would need to prepare for any trade-related ramifications. The Omani government must stay vigilant and aware of any escalations of friction amid increasingly harsh rhetoric from Washington and Tehran that threaten to unleash an armed conflict in or near the strait. Yet the ports’ advantageous geographic locations could help Gulf states continue to sell their oil and gas in the event of such a crisis, as shipments via Duqm and Salalah will not need to travel through the strait. Whereas Saudi Arabia has its Red Sea coast and the UAE has one Emirate (Fujairah) outside the strait, which would enable these two states to continue exporting oil in the event of the strait’s closure, Bahrain, Kuwait, and Qatar are fully dependent on that artery for their hydrocarbon exports. As Amer No’man Ashour, chief analyst and economist at CNBC Arabia, explains:
We all know that more than 30 per cent of oil shipments pass through the Strait of Hormuz and with this shift via the Port of Fujairah and the Duqm port, the GCC countries will ensure that their oil shipments are safe, and this will decrease the risk and the cost of insurance on ships… Al-Duqm Port is one of the best ever solutions to the oil issue… It is 800 kilometres away from UAE borders. We know that the UAE has had a partial solution via Fujairah with a capacity of 1.1 million barrels per day, but the production of the UAE is almost 3 million barrels per day. Most of Kuwait, Qatari and Saudi oil is produced in the eastern parts of the Gulf area and this new Omani port will be very suitable for exporting oil to the world.