Oman’s unrest may be a domino, not just to suppliers, but also to customers

There are reports that the unrest in the Middle East has spread to the Sultanate of Oman. While at the moment there have been only one or perhaps two deaths, small in number relative to the larger number of fatalities in countries like Libya, such a milepost, nevertheless, is sadly likely to indicate that the situation will get much worse. Oman lies east of the United Arab Emirates (UAE) South of Saudi Arabia, and north of Yemen. It is therefore within the region that is now in turmoil. And as the consequences of the unrest begin to compound, the consequences grow beyond the point where simple answers will be sufficient.

Location of Oman (CIA)

Oman is not a member of OPEC, but contains the largest oil reserves of any country outside that group in the Middle East.

Oman produced 863,000 barrels per day (bbl/d) of total petroleum liquids in 2010, 860,000 bbl/d of which was crude oil. Average oil production in Oman has increased by over 20 percent for the past three years, from a low of 714,000 bbl/d in 2007.

Oman oil statistics (EIA)

At the moment production is growing a little faster (865 kbd) than consumption (115 kbd) so that exports have increased a little. The EIA seems cautiously optimistic that this growth can be sustained in the short term, with the potential for Enhanced Oil Recovery technologies (miscible gas injection, steam and polymer flooding are the ones listed) to give a greater boost to these numbers. The main market for the oil is in Asia, with China and Japan as primary customers.

The EIA estimates that Oman has 30 Tcf of natural gas reserves, ahead of both Iran and the UAE. It consumes a fair portion of this so that when one compares production (2.4 bcf/day) with consumption (1.42 bcf/day) there is a smaller percentage available for export.

Natural gas statistics for Oman (EIA)

South Korea and Japan are the main customers.

As the turmoil continues to spread it is difficult to assess what effects it will have on the different exporting countries. (And thus in turn on the world market). Saudi Arabia has said that it can cover the possible lapses in delivery from Libya, and is willing to increase output to balance any losses. The full scale of that need is not yet, however, likely apparent. If I look at the numbers for February:

Total OPEC production slipped 285,000 barrels, or 1 percent, to an average 29.11 million barrels a day, according to the survey of oil companies, producers and analysts. Daily output by members with quotas, all except Iraq, decreased 335,000 barrels to 26.515 million, 1.67 million above their target.

Libyan output fell 200,000 barrels a day to 1.385 million this month, the lowest level since January 2003.

Unfortunately it may well be that Libyan production is cut in half, which would bring the loss closer to 800 kbd. Since the Saudi’s have been talking of just raising production to 9 mbd this may not be sufficient to make up for the loss. (They were running at around 8.6 mbd in January). If one adds to the drop in Libya any additional losses that might come from the falling dominoes around them, such as Oman, then it may become too much of a strain to rely on KSA by itself. Current additional flow is apparently coming from Abqaiq as well as Khurais.

One of the worries in the present situation has been the increase in violence in Iraq. At the end of last year OPEC had reached a two-year high of production at 29.85 mbd and the increase was largely due to an increase in Iraqi production. And while the refinery that was attacked on Saturday is now back in partial production it will be at least 6 weeks before the plant can be fully restored, and in the interim the company is searching for supplies from neighbors that could be used to meet the national demand. (Iraq's refined product stays in country to meet domestic demand).

Of course there are other available sources short term. Gazprom has increased gas supplies to Italy to help cover shortfalls that have arisen due to the supply pipe from Libya being closed. The replacement is a flow of some 1.7 bcf/day, up from the pre-crisis Gazprom supply of 1 bcf/day. And certainly Russia which is producing at equivalent levels to KSA must be considered as a possible additional source. But there is not a lot of spare capacity in their oil production numbers, and there has been talk that they might even decline slightly this year – so that while gas supplies might increase, it is hard to see much of a rescue coming from them at this time to meet any oil production shortfalls.

Individually all these individual areas of concern could be relieved by some compensatory change in supply – as the KSA and Gazprom responses to the Libyan declines illustrate. Unfortunately this is not the greatest concern. The spreading popular uprisings are continuing to develop in additional countries and the changes in government that will result (and the conflicts presaging them) will impact fossil fuel production and export over a much longer interval. Particularly if, as might be the case in Iraq, foreign instigators (perhaps Iranian) foment attacks on the distribution networks, then it will not take many incidents before the short-term stability between supply and demand is threatened. The irony there is that Iran itself is not invulnerable to a similar threat, both to the regime, and to their production of fossil fuels. And unfortunately the victim of any fall in production would again be Asia, with over half the Iranian 2.6 mbd of exports going to China, Japan and India.

"Not our problem" you might say – as those countries seem to be the customers to a number of the nations at risk – well it might be wise to note that this problem has not gone un-noticed, and both China and India have been purchasing more from Mexico, which given its falling production status, means that the traditional markets for that oil might not be getting as much in the near future. Wonder who that might be??

How friendly towards its own people is the Oman government?

I am wondering if the violence in Libya will have a dampening effect on other restive countries. Tunisia was largely bloodless. Egypt was effectively over in a week, with less than 1000 dead in country of 85,000,000. Libya is brutal.

Gadaffi may be the domino that refuses to topple. Protesters may see the violence and think twice about taking to the streets.

If Gadaffi survives, it will be a blow to short term western oil interests, as he will look to more reliable engineers and customers for his oil (china ?). but in the medium term it will stop the region toppling into anarchy for a few more years.

I think that you are probably right. Libya will be the domino that doesn't fall easily, as a protracted civil war ensues. It is another three provinces of the Ottoman Empire stuck together to make a state following WW I, with a tribal structure adding to the overall complexity. It is somewhat more homogeneous religiously, since it doesn't have a Sunni-Shiite split in the population. The resolution is likely to be protracted and costly.

States like Oman and Jordan are likely to cope by firing ministers, cleaning up corruption, and generally responding to some of the most grevious demands of the protestors. Omani protesters unmoved by sackings

Bahrain may end badly. Ultimately, it would turn into a religious war, and the Sunnis will kill however many Shiites as necessary. The Saudis will help as required. I expect a "Tianamen Square" moment eventually to quell Shiite initiatives on the west side of the Persian Gulf. Note that this doesn't really apply to Oman, which is 75% Ibadi muslim with a small Shiite minority.

If another domino goes down, it is likely to be Yemen. Yemen is a cobbling together of former Yemen and Aden. Plus it has a Shiite area in the north. They have fought civil wars before, and will likely again.

Oil situation to worsen as religious conflict gains traction:

It is another three provinces of the Ottoman Empire stuck together to make a state following WW I.

Actually, Libya was wrested from the Ottomans by Italy before WWI (1911) and didn't achieve independence until after WW II. (1951)

OK - a "prequel" to WW I if you will. Italo-Turkish War was an interesting little war. It saw the first use of aeroplanes for observation and bombing.

The Italian press began a large-scale lobbying campaign in favour of an invasion of Libya at the end of March 1911. It was fancifully depicted as rich in minerals, well-watered, and defended by only 4,000 Ottoman troops. Also, the population was described as hostile to the Ottoman Empire and friendly to the Italians: the future invasion was going to be little more than a "military walk", according to them.

Sounds familiar?

Italy did combine the Ottoman provinces into one colony, but Libya did remain a colony until after WW II.


If you think Egypt's revolution is largely over, you have been deceived by the MSM. US news reports cannot handle more than one "story" at a time - a bit like those ancient computers that occupied a room.

In fact, Egypt's revolution has barely begun. The military are still in charge and Mubarak was the public face of the military. The "Mukhabarat" (i.e. their Homeland Security) is fighting tooth-and-nail for its survival and for the continuance of the regime that has been in place since 1952. It will end very badly indeed as these people are psychopaths - just imagine a few hundred thousand people like Gaddafi to get an idea of the scale of the problem.

The amount of frustration in this Arabic-speaking world is beyond the comprehension of most Westerners.

Oil-production has peaked in the Middle East and the other side of the Hubbart curve will not be as smooth as it is made out to be. All the old chickens are coming home to roost at the same time. The poor USN is sending ships loaded with troops down the Suez canal one way and then back again the other way a few days later.

I've been to Oman twice in the last 4 years, and the impression I have is that the government (the Sultan and his cabinet) is enlightened and supportive, a good example of the "benevolent dictator". It is an hereditary Sultanate. If memory serves the present sultan has ruled for about 30 years. He was educated in the UK. His father had kept the country almost totally closed to the outside world. The son has opened the country to development and tourism, and has used oil revenue to build a fairly modern society with good health care, good housing, very clean urban areas, apparently good governance. One sees very little evidence of security forces, no evidence of repression, and I saw no military while there. Society is open and the people are very friendly. I would be very surprised at any serious unrest. Some of the people might want elections, but they can't ask for much else. A benevolent and wise dictatorship is probably the best form of government, at least for a small population, and I think Oman is well served in that sense. I have not visited Salalah, which is near Yemen, and might be a trouble spot. Other opinions??

I lived in Oman for 5 years and agree with Murray. I have great memories of living there so I am saddened to read of the unrest. Although there has been unrest in Oman before, the Sultan brought the country into the 20th century in 1970 and the people there seemed genuinely happy. There may have been concern about corruption but these concerns never included the Sultan himself. He has walked the line between the examples of the KSA and the UAE and done a good job. Before he started to allow much tourism, he first got roads, potable water, schools, clinics and electricity to the villages. He has allowed development but the culture has not been steam-rolled and the people I knew there were very proud of their country. I hope that the country can diversify its economy more so that it can off-set the downturn in oil in the future.

I went four times in Oman in the last two years, and I mostly agree with you. My opinion is that the Sultan is appreciated by most of the population, especially people beyond 40 years old who have seen the changes and the development of the economy. Different views may exist nevertheless, among young people for example who have never known the very low level of richness that was existing 40 years ago, at the time when Oman was quite like the actual Yemen.
Oman is by far the country I appreciate the most in the Gulf region. Nothing to compare with Saudi Arabia (which is much more closed and mitlitary) or Emirates (where the development of Dubai has reached some ultimate level of nonsense).

"Oman is by far the country I appreciate the most in the Gulf region. Nothing to compare with Saudi Arabia (which is much more closed and mitlitary) or Emirates (where the development of Dubai has reached some ultimate level of nonsense)."

I endorse this view wholeheartedly. Murray

I worked in Oman for nine years and I can testify that it has an enlightened government, which has taken a country with only a few miles of tarmacked roads and one cottage hospital in 1970, and where I might add there was a nightly curfew in the capital - with the gates locked at sunset - to being the most pleasant of all the Gulf states. The Sultan has done a brilliant job, and the innate gentleness and decency of the people has contributed. However, the population has doubled, and notwithstanding a very good education system and arguably the best public health system in the world, there is a lot of unemployment. I should add that there is no discrimination against women working in any field in Oman, unlike Saudi Arabia. From the beginning there was the intention that jobs done by foreigners would eventually go to trained Omanis, and this has largely happened, however, with little industry and a limited service sector there are simply not enough of the jobs that many of the young are prepared to do. Three years ago, when international food prices rose, there were grumblings about the cost of feeding a family, such was the price of a sack of rice. World food prices have ameliorated somewhat, but there are still vast differences in income, and an enlightened despotism, although having been very successful in practically creating a sophisticated modern state from scratch, will need to be very agile to adapt to quickly changing demographics and expectations.

I would expect the government of the Sultan to be as successful at this as any, but the tensions nevertheless remain.

Interestingly, Omani women traditionally never veiled (except the bedu, who wore masks) but now a number of, mostly younger, women have adopted the full naqib face covering. This is an interesting phenomenon. Stimulated by this sartorial change on the part of women I asked an Omani friend a couple of years ago if any boys were now named Osama, which was a name I encountered not even once when I lived there, and I was told, with a wink, that it has become quite popular. Make of that what you will.

To all of you who have "lived in Oman for n years"

I have a few questions:

1- Do any of you speak, read and write Arabic?

2- Have you ever been to the home of an Omani who was not a colleague at the oil/gas/military/government establishment that you worked for?

3- Have you attended school/college/university in Oman?

4- Do you have an Omani spouse?

If your answer is "no" to all of these questions then why do you trot out these standard phrases about "benevolent dictators" and similar claptrap. I am sure that if you visited the Reich or the Soviets in the 1930's, you would have been saying much the same thing. Please grow up and stop thinking that the desire for personal freedom ends when the language goes from right to left.




Difficult one!

Difficult one!

so many ways to interpret that reply <?- )


Well Sonny, I've lived in 8 countries, including one Arabic country headed by a benevolent despot (where I had to speak to my colleagues in French, our common second language) and speak 3 languages. I've worked extensively in 8 other countries, mostly starting up, turning around or improving work and employee satisfaction conditions in local factories. Ive travelled mainly on business and conducted negotiations in an additional 72 countries, including the then Soviet bloc. I don't think I need to grow up, and I do know quite a bit about both repressive regimes, and how to read conditions on the ground. What are your qualifications?

"A benevolent and wise dictatorship is probably the best form of government, at least for a small population"

so probably ireland, switzerland and denmark would be better of with a dictator. but then from the chinese point of view all european countries have small population, so in fact dictatorship would be best for all of them! but since the chinese have figured that a sort of dictatorship is good for them too, then logically dictators are good for everybody!

Read the qualifiers - "benevolent and wise". Two good recent examples of "duly elected", but effectively benevolent dictatorships from about 1950 to 2000 (don't hold me to the dates) are Malaysia and Singapore. In terms of peaceful development they put all other countries in the shade, and IMHO the Swiss government could never have come close, even though Switzerland has seen a remarkable development from pre WWII to now. While Switzerland is not even near a dictatorship, it is certainly a benevolent police state, especially for resident foreigners. I have lived in and near Switzerland for 24 years.

second that comment. and, while switzerland is still rather politically or legislatively democratic, economically, in many ways this is moot, as the whole country is a big cartel.

Switzerland also has got to be near the top for unsustainability. The country,
despite enormous economic support for local production, will never be able to feed the 7-8 million who live there, and beneath the very strong looking
economic performance (huge trade surplus, often surreal affluence) is an enormous dependence on some of the most fragile aspects of the rest of the world's economy. Before the rest of europe evolved modern, sophisticated theories and methods of extracting a greater portion of their population's wealth (under the pressure of fighting WWI), switzerland was a poor backwater
whose main export was cheap labor in the form of emigrants.

Switzerland was a poor backwater whose main export was cheap labour in the form of emigrants

... and mercenaries - just like the USA

just like the USA

???? since when have cheap labor and mercenaries been the main export of the USA? Our mercenaries are of course very high priced and probably do not count as main export. You of course might be counting the US national defense resource expenditure as a mercenary but that isn't at all the same product as the Swiss mercenary export, and it is a net drain on our economy rather than a source of foreign capital

...and we are importers of cheap labor, through myriad means--have been since indentured servitude and slavery were in vogue.

"the best form of government" only lasts as long as the life of the wise dictator, then all bets are off. Over and over in history around the world you see the pattern - where a wise ruler is succeeded by a tyrant, or a despot or wastrel. The best form of government is also the least stable, and the most inherently helpless where the populace does not choose its leader.

Democracy (in its many forms) may not ever be the best or the most efficient, but it is inherently stable in comparison. Few countries can look back at as long and as generally prosperous a history as Switzerland.

But you also see kingdoms that have been ruled well for centuries while other forms of governance evolved, including Denmark. Some, like Singapore and Malaysia seem to be making the transition. Morocco and Oman and the Emirates just might make it too. I agree that democracy is more stable, but has often developed through long trials and instabilities. There is no fixed rule or valid generalization.

The Sultan of Oman is eminently revered by the people of Oman, young and old. He's given credit by Omanis for bringing them out of the middle ages in 1970. There have been a spate of opeds reflecting this across the NYT, FT and WSJ lately. I've studied Oman closely for the last 2 years and cannot but believe that the unrest there is ebbing, and the media has lumped Oman in with "the contagion effect" without taking time to study the country itself.

nearly 100% ibadhi islam, oman grew out of a rejection of the wahhabist Saudi strain. they are categorically conservative people and largely reject any forms of extremism.

do not bet on Oman to fall like just another domino.

Ibadhi Islam compares to my mind with Quakerism: calm, polite, quiet and tolerant.

Oman is well governed and the people appreciate the huge improvements made to their lives under the rule of the sultan. However, economic pressures are real and so the greatest achievement of Qaboos will be to enable a transition to a more representative government without the whole political edifice falling apart.

You are very right to suggest that Oman is not quite like the rest of the Gulf states, and the Omanis would not want to be either.

Sorry heading out,

Simply put this post is way off base and other than the title and the first few sentences offers up no evidence whatsoever that there is a problem there. You then go on to talk about the rest of the gulf states?!?! I've got (UK) family on the ground there working in the oil industry and they basically think any idea of a sustained uprising here is absolute nonsense. I really think the press would love there to be a problem here! Look at the date on the article you link: its the 1st March! I'm not saying there couldn't be more trouble but it's simply not a sustained motivated movement there - for many good reasons that the posters above state.


It is really great to get the opinions expressed here by posters with experience on the ground. Such unanimity. I would never have gotten them without HO's article.

The posts imply that people care little about their dignity, only about economics. Again, economic teachings are the only truth.

Don't misunderstand me, the quality of the imformation that HO presents on the post is, as usual, excellent WRT production supply disruptions and effects in other Gulf states. However the post needs a new title: something like: "Oil supply disruption in the gulf states", but yes the debate wouldn't have otherwise be stimulated.

You should perhaps realize that there is a time interval between the date that I write the post (check the original post date on Bit Tooth) and the time that it goes up on The Oil Drum. The protocols on this site now take some time to negotiate, as a general rule. And for that inconvenience I apologize.

I notice that there was some disturbance in Kuwait this weekend. It is difficult to see where this will end, and in almost all countries the old way of doing things is gong to change. We don't know what the results will be, but it is hard for me to see it being favorable to increased or even stable production of hydrocarbons across MENA.

All these regimes, these dictatorships, "benign" or otherwise are... goin' down, thank God!

I've been around the Middle East too, but I saw something completely different. I saw degenerate and deeply corrupt regimes that represent only a tiny fraction of the population. The British had special-forces mercenaries on the ground in Oman for years fighting against revolutionary forces and with Saudi helpt they eventually prevailed, but that's the past, the future is something else. Oman's corrupt and despotic regime is doomed, along with the rest of them. Yemen is experiencing a revolution. There are the beginnings of a revolution already in Suadi Arabia, which is why the regime is arresting activists and transporting thousands of troops and equipment to the Shia dominated eastern province, where interestingly the major oil fields are situated.

The Saudi Royal Family is intensely disliked by broad sections of the population, for its incredible greed, incompetence, arrogance, and brutality. Saudi Arabia has about 50% youth unemployment and atrocious conditions for the peasantry compared to the gross luxury the ruling aristocracy live in. All Saudi Arabia needs is a spark and it will explode.
The fact that the regime has chronically over-exploited their only resource, oil, and has pumped too much, too fast, and sold it way too cheaply, is a national crime, and when ordinary Saudis understand that the regime has also been systematically lying about the size of the remaining reserves, which are 50% lower than the regime claims, and virtually all the best quality oil is gone, all hell will break loose.

Saudi Arabia cannot remain as an island of corruption, degeneracy, and despostism, when the entire region is exploding around it. I'm giving Saudi Arabia a year, tops, before the revolution comes knocking on the door of the King's palace, and when that happens, all his foreign mercenaries and the thosands of secret policemen won't be able to put his regime back together again.

There appears to westerners to be be an homogeneity to the Gulf states, but in fact they are no more similar than the countries of western Europe. The Saudi state is in thrall to puritanical Wahhabi theocracy and this concordat has initiated a terrible hypocrisy, with a corrupt and often degenerate governing elite oppressing a supplicant population, which has been bought off with huge largesse. That these doles cannot be sustained is the main reason for the incipient Saudi instability. Omanis hold no brief for Saudi Arabia and the nationals are not fond of each other. Nor do Omanis have much fondness for Kuwaitis, who, like the Saudis, they feel to be conceited and arrogant.

It is true that Oman's autocratic regime put down a rebellion, just as it is also true that tribal loyalties are still very strong, but there was no tradition of elective democracy and no tribal confederation that showed any sign of evolving into a regime that would have made a modern state from nothing in only forty years. In any case, the Al Said family have legitimately ruled Oman since the 1740s. Probably the time for change has come, and the new problem for the ruler will be giving up some of his powers and allowing the newly educated Omanis to participate properly in their own governance. The shift from autocratic to democratic rule has historically been beset with dangers.

It is a mistake to lump in Oman with the rest of the Gulf states. There are obvious similarities, but scratch the surface and you will find enormous differences. As far as I have read, and heard, there is little wish for an overthrow of the ruler in Oman, only for a newly educated populace to have more say in the running of its affairs. There are tensions in the Gulf and the whole Arab world, caused by increased population and resource stressing. We in the west are not immune from such impacts, and we too are finding it hard to manage an economic shift away from manufacturing towards... what, I wonder, while at the same time finding work and a reasonable livelihood for an increasing relatively impoverished number of our people. And we are supposedly democracies!

Hi Ulpian,

we too are finding it hard to manage an economic shift away from manufacturing towards... what, I wonder,

Not to worry.... I watch CNBC every day and I've been assured (there is no doubt) that American entrepreneurship and exceptional-ism will maintain our world leadership position indefinitely. Manufacturing is for poor countries who's very survival is dependant upon supplying our consumer needs. This is simply part of the divine plan of maintaining world order. Here in the USA, just the other day, we demonstrated our dominance of global enterprise with the release of the new IPad - what more proof could you want? Besides, just look at last year's annual Wall St bonuses if you need any further proof of our command of the really important things in life.

Wonder why the meme that producers need consumers is so strong?

Producers ultimately only need paying customers, no business can survive withouth being paid with something tangible enough to keep going.

dave - And if I heard correctly on NPR the other week: 99+% of the folks making the IPad are doing so overseas. That's one reason why they are so cheap. Well..if not cheap but why they have such a high profit margin. Certainly a much better PM than if they were built in the U.S.

Hi Rockman,

Yes, there was also a bit on cable TV showing the Chinese factory where IPads are manufactured (along with some data about suicide rates among those factory workers). This came up because Senator McCain was boasting about IPads and IPhones being manufactured in the US.

What Apple does is design the user interface and engineer much of the electronics and software along with marketing and distribution. They outsource whatever production processes provide an economic advantage. Of course, Apple generates revenue/profit within the US with this business model.

I think (not sure) what Magnus is implying is that is a good model as the rest of the world gives us "tangible" stuff in return - like oil, toasters, winter grapes, etc. My concern is that model is also very fragile if our complex global systems start to break down. How much trade-able value will the next generation of an IPad have in world where we need to be more self reliant for basic necessities? I'd feel a lot better if our economy was less based upon IPad, Twitter, and credit default swaps and more centered on the basic goods and services needed to sustain a reasonable quality of life for a broader cross section of our population.

1) Apple does much of it's software development overseas
2) As the education level overseas rises it will be cheaper to do the engineering overseas
3) there is no reason US wage rates should be higher than global wage rates

Hi edpell,

Apple does much of it's software development overseas

I can easily believe that. I've not worked for Apple but I did do design/development for some high end industrial software and that company also used India for much of the lower level design and programming - especially the writing of code from well designed specs. But, I imagine that Apple, like the company I worked for, did most of the high level requirements, design, integration, and quality assurance in the home offices.

there is no reason US wage rates should be higher than global wage rates

Although I can appreciate that statement, I would hope you are implying that global workers should all enjoy adequate pay and good working conditions - not the "race to the bottom" that is too often the case.

3) there is no reason US wage rates should be higher than global wage rates

Well there is one 'good' reason. The whole US house of cards falls when the bottom collapses--which has been happening in slow motion for some time now.

Mexico and Chile have income at around the percapita world average--but those are about four times higher than the percapita world median income.

You'd best watch what you wish for.

I worked for Apple Computer, though not a a programmer. A lot of the low-level nity-grity programing was done in-house. Macintosh programing is different enough to require specialization and the guys overseas can't get enough Mac work to justify the investment.

Ulpian, my plaudits for an insightful, nay even sagacious, input. I wish I had said that. Murray

Thanks Murray; appreciated.

Oman is one place I know something about. As a matter of fact, when I arrived what surprised me most (I was naive) was that the Omanis were so much like myself; same sense of humour, same feelings about the generalities of life, and the same manners. As long as I remembered to behave like an Edwardian I was able to lead a very uncomplicated life.

Regarding political instability: at the time of the Iranian revolution I asked an Askar (soldier/guard) on a public building what he would do if the Iranians invaded Oman. Would he be in the front line protecting his country, or...? I confess to having been a bit devil's advocatish here - but his response was instant, he said, effectively; no way, he'd head back immediately to the interior to protect his family in his tribal area. He had no hesitation about this. For him the unified state was an international reality and a source of employment, but his heart lay elsewhere. I often wonder how much thirty years of nation building has changed these perceptions and where, even today, the loyalties of the Arab peoples really lie?

The fact that the regime has chronically over-exploited their only resource, oil, and has pumped too much, too fast, and sold it way too cheaply, is a national crime

Hear hear!

Not only did they sell it too cheap, but they bought expensive, largely useless and over-priced weaponry with the proceeds. This was called the Nixon Doctrine and has been in vigour for an awfully long time. Obviously, it has been updated to include ever more clauses and gifts to those protecting the royal families and dictators.

Here is how Oman fits into the larger picture of oil exporters.

Very good point!

The surprising thing is that Oman has managed to slightly increase its relatively small production during the past five years.

However, obviously Oman is not immune from the social stresses that are revealing themselves all over the middle east and north Africa, and that there should be visible discontent in one of the best governed and apparently most stable Arab states is itself cause for concern.

Heading Out: There appears to be a mistake in this article related to the statement that Oman has natural gas reserves of 30 TCF, which is slightly larger than the reserves of Iran. The CIA Factbook lists Oman's gas reserves at about 850 billion cubic meters, 28th in the world, while Iran's are listed at 29.6 trillion cubic meters, 2nd in the world.

If you follow my reference - The EIA - you will find the statement about the 30 Tcf at the top of the page, and I believe you will find that if you convert 0.85 Tcm you will get 30.02 Tcf.

Another imperial/metric conversation error. There are a very simple solution to this problem...

yes its time to go to the cubic cubit

While Oman may have natural gas reserves of 30 TcF, Iran has reserves of ~30 TcM (Cubic Meters not Cubic Feet). At least according to the CIA Factbook, Iran is #2 in the world, behind only Russia with ~47 TcM of proven natural gas reserves. And the same source has Oman as #27 with just 0.85 TcM (or 30 TcF).

The only mistake seems to be where the article says that Oman has natural gas RESERVES greater than Iran and UAE. It should instead say that Oman had greater natural gas EXPORTS in 2009, not reserves. This is what the referenced EIA chart shows. In the case of Iran, this is possibly due to sanctions.

Maybe the people of Oman want more than to be well kept slaves of the dictator of Oman.

Edpell, you must live in a black and white world, with a very limited concept of freedom. Believe me, the Omanis are not "well kept slaves", and from what I have seen they feel about as free as we do in western Europe or in North America.

Remember there is "freedom to" and "freedom from". I think Omanis have about as much freedom to as most Americans, and more freedom from than some millions of Americans.

The simple minded equating of monarchy with slavery, or freedom with democracy, reminds me of an old comparison we used to use about Europe pre 1989;
In Russia, everything is forbidden, especially those things that are allowed.
In Germany everything is forbidden, except those things that are allowed.
In France everything is allowed except those things that are forbidden.
In Italy, everything is allowed, especially those things that are forbidden.
and In Switzerland, everything that is not forbidden is required.

and except for Russia, all those people were considered, and felt free.

Why is it necessary to presume unhappiness on the part of the Omanis, as if they were imbued with the same silly ideas we have been taught?

Peace and rising prosperity sort of negate unhappiness, which is their intent. Can no credit be given for enlightened governance?

What's the purpose of freedom, anyway? Goofiness?

Enlightened despotism, if that's what you want to call it, has worked very well to bring an uneducated people from astonishing poverty to great material comfort in only forty years. Yes, there were the usual mistakes: nepotism, monopolies, favouritism, too much spent on the military, unnecessary grand projects, but no society is immune from these conceits, and to expect Oman to be when we, for example, are not, is asking too much. In part, some of these vanities anyway seem necessary as a part of nation building.

The shift towards a more representative system has always been agonising. All European nations found the transfer from absolute monarchies and oligarchies - for want of a better description - with their monopolies, class hierarchies, and expensive vanity projects, extremely painful. How many revolutions, re-revolutions and wars have we all endured to get where we are today!

It is easy to crow, but it took us centuries and we still have unfinished political business. Oman is at a turning point, as are all the Gulf states. The status quo cannot endure of course, but for us to pour scorn on great achievements, as if our political systems are so perfect, is unfair.

And it is odd to read that Oman sold its oil too cheap, when we in Britain did exactly the same thing, and now Obama is said to be looking at the strategic reserve to help modify oil prices! It's all nuts in the end.