Oman Trade

Subchapters:

  • Business Relationships
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

For the Czech Republic, Oman represents a small market of million inhabitants – very open to international trade and therefore relatively competitive – with high purchasing power, good payment ethics and demand for the most modern goods and sophisticated technologies. The market for our goods is mainly accessible by air and sea transport. OM currently allows interesting incentives for localizing production (not only) to Czech companies on its territory. A big advantage of the Omani market is its overlap with the markets of the GCC states (FTA), Iran (OM does not participate in international sanctions) and other Arab and East African countries (due to ties since the Middle Ages).

Trade relations with the EU

The trade balance of the EU-27 countries with Oman is in a significant surplus in favor of the EU. Oman is the EU’s 65th trade partner, while the EU-27 is the 6th. Petroleum products and chemicals are imported into the EU-27. Machinery, chemicals and food are exported. Oman’s largest European trading partners are: ES NL FR IT BE for exports from Oman and imports to Oman: DE IT BE NL and FR.

Trade exchange with the EU (million EUR)

2018 2019 2020 2021 2022
Exports from the EU (million EUR) 3,421.4 3,223.2 2,984.6 ON ON
Imports into the EU (million EUR) 628.3 529.4 318.2 ON ON
Balance with the EU (million EUR) -2,793.1 -2,693.8 -2,666.4 ON ON

Source: European Commission

Trade relations with the Czech Republic

The balance of our bilateral trade with Oman is significantly surplus in favor of the Czech Republic. We mainly export turbo generators, gasoline passenger cars with an engine capacity of over 1,500 cc, computers and their components (processors, HDDs, laptops, desktop computers, monitors and keyboards). We import brakes for cars, fertilizer – urea, perfumes and toilet waters.

Trade exchange with the Czech Republic (billion CZK)

2018 2019 2020 2021 2022
Exports from the Czech Republic (billion CZK) 1.3 1.3 1.4 ON ON
Imports to the Czech Republic (billion CZK) 0.4 0.4 0.4 ON ON
Balance with the Czech Republic (billion CZK) -0.9 -1.0 -1.0 ON ON

Source: businesscarriers.com

FTAs and treaties

Treaties with the EU

The EU has long sought to conclude a comprehensive free trade agreement with the GCC. However, negotiations are deadlocked. In the absence of this agreement, individual member states conclude bilateral (economic, investment and tax) agreements with Oman. E.g. 11 EU member states concluded an investment protection agreement with Oman.

Contracts with the Czech Republic

The Czech Republic is trying to conclude three basic trade agreements (on economic cooperation, protection of investments and prevention of double taxation). In the current absence of these agreements, Czech companies are significantly losing out to their European and international competition.

Oman FTA

Oman has concluded several free trade agreements either bilaterally (BFTAs) or through the GCC (RFTAs). Therefore, if a Czech company locates production in Oman, the goods produced there can be freely sold on the GCC, PAFTA markets, to Singapore or the USA. GCC RFTAs with EFTA countries, Australia and Japan are being prepared. Oman’s PTAs (preferential trade agreements) with Armenia, Australia, Kazakhstan, New Zealand and the Russian Federation are also in force.

Developmental cooperation

The Sultanate of Oman is classified as a high-income country, but still does not appear as a provider of significant development aid. It participates, for example, in the Aid for Trade Initiative for the Arab States (AfTIAS 2) program.

In the future, the expected involvement of Oman in reconstruction in neighboring Yemen after the end of the armed conflict there may represent a certain opportunity for Czech companies.

Prospective fields of study (MOP)

Currently, we see opportunities in Oman especially for companies that are able to locate part of their production in the country and from there cover the needs of customers not only in the GCC countries, but also in Iran, East and North Africa and Southwest Asia. Oman is not only interested in the automotive industry, it strives to develop agriculture and the food industry and build new renewable sources in the energy industry (for which it has a unique disposition, especially in solar energy).

From June 2021, the government’s strategy for the implementation of the country’s controlled industrialization (Manufacturing Strategy 2030) was published. The government’s priorities are to build industrial enterprises and manufacturing plants based on (1) knowledge (high-tech), (2) capital, and (3) domestically available minerals. According to this strategy of the government, investments will be attracted to the country and the following plants will be built. And this can also be an opportunity for subcontractors in the following industries.

Agriculture and food industry (ISIC4: 1010, 1020, 1040, 1050, 1061, 1071)

It concerns the processing of meat, fish and seafood, vegetable oils and animal fat, dairy products, cereals, flour and bakery products. Oman is a major food importer and sees this as its major shortcoming. The government wants to achieve food self-sufficiency in a number of areas, export fish and seafood, etc.

Energy Industry (ISIC4: 2710, 2732, 2790)

It concerns the production of electric motors, generators, transformers and distribution boxes and control panels, insulated wires and cables and other electrical equipment.

Pipes and valves (ISIC: 2813, 2819)

In Oman, these are mainly pipeline systems for the transportation of oil, gas and water. Unfortunately, however, these are often products in the system of imperial units (the metric system, to a lesser extent). More in US standards, less in our metric system. As for the items, they are pumps, compressors, faucets, valves, pipelines, electronic and smart valves, sensors with solar panels and other electronic components.

Recycling, waste management, circular economy (ISIC4 rev.3: 3710, 3720)

In its strategy, the government is looking for technologies as a priority and wants plants for the processing of scrap metal, metal waste and non-metal waste, but the processing of secondary raw materials in the country is in its very early days. The country needs sorting and recycling technologies with local plants processing secondary raw materials as well as construction debris, hazardous waste, hospital and pharmaceutical waste. Today, all unsorted waste ends up in common landfills. These technologies are just starting in Oman, the government is fully aware of these shortcomings and wants to move the country forward quickly, when else to start in this area in Oman if not now?

Mineral processing (ISIC: 2310, 2394, 2395, 2410, 2420, 2511)

Production of glass in all forms and glass products (sheet glass, colored, tinted, tempered, optical cables, pipes, mirrors,…), production of cement, lime, plaster and other products from them (concrete products, production of plasterboard, artificial stone, processing of natural stone, production of tiles, bricks, panels, posts). The government wants to develop basic iron and steel production in the country, basic production from precious and non-ferrous metals. He also wants to ensure the production of metal elements and components for the construction industry (metal structures, scaffolding, frames, metal doors, windows and their frames, blinds and gates, etc.) in the country. There are indeed many deposits in the country, the state has invested in basic capacities in recent years and now wants to acquire and develop downstream production in order to achieve higher added production and not only export basic raw materials.

Healthcare (ISIC: 2100, 3250)

The government is in demand for the production of pharmaceuticals, health chemicals, botanical products, perfumes, incense processing, etc. The government would like to develop the country’s production of medical devices, surgical instruments, orthopedic aids, etc.

Oman Trade