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Bond Market News
Oman Posts Budget Surplus of $2bn on Higher Oil and Gas Revenues
August 8, 2022
Oman posted a budget surplus of OMR 784mn ($2bn) for H1 2022, primarily due to higher revenues from oil and natural gas. The Gulf nation’s revenues jumped more than 54% in Q2 to OMR 6.7bn ($17.4bn), with oil and gas revenues contributing the most at OMR 3.2bn ($8.3bn) and OMR 1.7bn ($4.4bn) respectively. Oman, along with other gulf oil producers, have benefited from the surge in oil prices as a result of the Russian-Ukraine war. Zawya notes that if oil prices remain elevated, there is a high likelihood that even the weakest Gulf economies will be able to achieve budget surpluses. Aside from its rising revenues, Oman’s total public debt has also decreased by 11% since end-2021 to OMR 18.6bn ($48.2bn). Bloomberg notes that this is due to a series of reforms implemented by the Omani government to balance its budget and lower its debt. The Middle Eastern state repurchased more than $700mn of its outstanding bonds in June and plans to continue to do so in the near to medium term. Oman is currently rated Baa3/BB-/BB-.
Despite the positive news, Oman’s 7% 2051s dipped 0.99 points and currently trades at 95.17, yielding 7.41%.
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