DOI: 10.6084/m9.figshare.31366561
title: Why Oman Is an Underrated Strategic Choice for the Future?

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\title{Why Oman Is an Underrated Strategic Choice for the Future?\\
{\footnotesize \textsuperscript{*}Note: This is a PREPRINT Draft and it is not a Final Research}
}

\author{\IEEEauthorblockN{Mohammad Ali Piran}
\IEEEauthorblockA{\textit{Master's in Electrical Engineering} \\
\textit{Power Systems Specialization and AI Research, Energy Management Branch}\\
Contact: +968 77476349
}
}

\maketitle

\begin{abstract}
This review-style preprint argues that Oman represents one of the most underestimated strategic opportunities in the Middle East’s energy transition. Unlike fossil-rich neighbors, Oman’s relatively constrained hydrocarbon base has forced a pragmatic diversification agenda. With abundant solar resources, political stability, and lower market saturation, Oman offers a unique entry point for investments in renewable energy, energy storage, and smart grid technologies—provided that the current window of opportunity is not missed. The analysis draws on policy documents, economic reports, and comparative data to highlight Oman's advantages, risks, and policy needs.
\end{abstract}

\begin{IEEEkeywords}
Oman Vision 2040, energy transition, renewable energy, energy storage, Middle East geopolitics, investment opportunities, policy recommendations.
\end{IEEEkeywords}

\section{Introduction}
In recent decades, geopolitical and economic competitions in the Middle East have largely revolved around abundant fossil fuel resources. However, the global paradigm shift toward clean energy, digitalization of energy networks, and knowledge-based economies has created new opportunities for countries with more flexible structures. This review article analytically examines why Oman, compared to larger players like Saudi Arabia and the United Arab Emirates (UAE), could be one of the most attractive investment destinations in clean energy, energy storage, and grid smartening in the coming years. The primary focus is on developmental realism, the risk of missing the opportunity window, and Oman's untapped capacities.

Oman's economy has historically been reliant on oil and gas (accounting for approximately 65–70\% of government revenues), but unlike many oil-dependent regional economies, Oman faces relative reserve constraints. This limitation, rather than a weakness, has become a strategic driver for diversification. Key features of Oman include lower dependence on massive oil rents, real pressure for economic structural reform, and institutional compulsion for long-term visioning. These factors have made policy-making in Oman less performative and more problem-oriented compared to wealthier neighbors.

\section{Methodology}
This review article employs a mixed-methods approach to analyze Oman's role in the Middle East energy transition, drawing on established methodologies for energy policy review papers as outlined in studies on regional energy strategies. The primary method is a comprehensive literature review of academic, policy, and institutional sources, including reports from the International Energy Agency (IEA), World Bank, International Renewable Energy Agency (IRENA), and Oxford Institute for Energy Studies. We systematically searched databases such as Google Scholar, ScienceDirect, and ResearchGate using keywords like ``Oman Vision 2040,'' ``Middle East energy transition,'' ``renewable energy in Oman,'' and ``energy storage policy recommendations.'' Inclusion criteria focused on sources published between 2020 and 2026, emphasizing peer-reviewed articles, policy briefs, and official government documents to ensure relevance and credibility.

Qualitative analysis involved thematic coding of key documents, such as the Oman Vision 2040 framework, to identify pillars, gaps, and implementation challenges. Comparative analysis was conducted using a multi-criteria framework to benchmark Oman against Saudi Arabia and UAE, incorporating metrics like market saturation, investment competition, geopolitical pressure, policy flexibility, and entry costs. Quantitative data integration included energy production statistics from IEA (e.g., renewables at 2.715\% of power generation in 2023), GDP diversification targets (reducing oil's GDP share to 8.4\% by 2040), and emission trends (78 Mt CO2 in 2023).

Case studies from Oman's ongoing projects, such as the Ibri II Solar Plant and green hydrogen initiatives, were reviewed for practical insights. Policy recommendations were derived through a deductive process, synthesizing expert insights from sources like the Ministry of Energy and Minerals' policies and global transition roadmaps. Limitations include reliance on publicly available data, potential biases in government reports, and the evolving nature of energy technologies; future research could incorporate primary surveys or modeling simulations for deeper forecasting.

\section{Macroeconomic and Energy Framework of Oman}
Oman's economy remains oil- and gas-dependent, with hydrocarbons contributing 65–70\% of revenues. However, limited reserves—estimated at 10–20 years for natural gas—have compelled diversification. Unlike neighbors, this constraint fosters pragmatic reforms rather than rentier complacency.

Key features:
\begin{itemize}
\item Lower reliance on massive oil rents.
\item Genuine pressure for economic restructuring.
\item Institutional drive for long-term planning.
\end{itemize}

This results in more issue-driven policies, emphasizing sustainability over spectacle.

\section{Oman Vision 2040: Focuses and Gaps}
Oman Vision 2040 is built on three pillars:
\begin{enumerate}
\item A diversified and sustainable economy.
\item An empowered and inclusive society.
\item Efficient and accountable governance.
\end{enumerate}

In energy, it emphasizes:
\begin{itemize}
\item Renewables (solar, wind, green hydrogen) targeting 30\% of electricity by 2030 and 35–39\% by 2040.
\item Energy efficiency improvements (energy intensity to 17.3 by 2040).
\item Attracting foreign investment and localizing key technologies.
\item Reducing oil's GDP share to 8.4\% by 2040.
\end{itemize}

Gaps include slow implementation, institutional depth, and soft infrastructure shortages (knowledge, human capital, innovation ecosystems). These represent prime investment opportunities, such as in R\&D hubs and skills training.

\section{Risk of Missing the 'Window of Opportunity'}
Oman's opportunity window is limited due to:
\begin{itemize}
\item Intensifying regional clean energy competition.
\item Rapid maturation of technologies (batteries, hydrogen, AI in grids).
\item Cumulative advantages for early ecosystem builders.
\end{itemize}

If Oman limits to symbolic projects or remains a technology assembler, the window may close in 10–15 years. Delays could lock Oman into fossil dependency amid global net-zero pushes (e.g., Oman's 2050 target).

\section{Energy Storage in Oman: Concept and Practical Application}
In Oman, energy storage extends beyond batteries to include:
\begin{itemize}
\item Grid-scale Battery Energy Storage Systems (BESS).
\item Thermal storage.
\item Green hydrogen as an energy carrier.
\item Demand response management.
\end{itemize}

Importance stems from solar production variability, geographic consumption dispersion, and hot climate grid stability needs. Recent policies like the 2025 Renewables Policy promote integrated storage, with opportunities in BESS for industrial resilience.

\section{Why Oman Has More Untapped Potential Than Saudi Arabia and UAE}
\begin{table}[htbp]
\caption{Comparative Criteria}
\begin{center}
\begin{tabular}{|l|c|c|c|}
\hline
\textbf{Criterion} & \textbf{Oman} & \textbf{Saudi Arabia} & \textbf{UAE} \\
\hline
Market Saturation & Low & Medium & High \\
\hline
Investment Competition & Lower & High & Very High \\
\hline
Geopolitical Pressure & Lower & Higher & Medium \\
\hline
Policy Flexibility & High & Medium & Medium \\
\hline
Entry Costs & Lower & High & High \\
\hline
\end{tabular}
\label{tab1}
\end{center}
\end{table}

Oman's appeal lies in balance, stability, and genuine development needs, not scale.

\section{Policy Recommendations}
To capitalize on opportunities, the following expanded recommendations target policymakers and investors, based on IEA, IRENA, and national strategies:

\begin{enumerate}
\item \textbf{Strengthen Regulatory Frameworks}: Enhance policies like the 2025 Renewables Policy for Self-Generation and Direct Sale. Introduce incentives for BESS integration, such as feed-in tariffs and net metering, to liberalize markets and allow direct sales from renewables without sole offtakers.

\item \textbf{Financial Incentives and Funding}: Provide subsidies, tax breaks, low-interest loans, and green bonds for RE and storage projects. Allocate funds for R\&D in smart grids, RE integration, and energy storage, targeting USD 190 billion in additional capital by 2050 for net-zero pathways. Encourage public-private partnerships (PPPs) where private sector finances 70–80\% of transitions.

\item \textbf{International Collaboration and Technology Transfer}: Foster partnerships for green hydrogen (aiming 7.5–8.5 Mtpa by 2050) and solar/wind IPPs. Import resilient technologies (e.g., long-duration storage) while localizing through training programs.

\item \textbf{Capacity Building and Workforce Development}: Invest in education for skills in RE, cybersecurity, and energy management. Aim for 20–30\% employment growth in power and hydrogen sectors by 2050.

\item \textbf{Infrastructure and Resilience Focus}: Upgrade grids for RE (e.g., EV charging, hydrogen pipelines). Prioritize desalination and demand flexibility for climate resilience.

\item \textbf{Monitoring and Just Transition}: Establish bodies like the Oman Sustainability Center for progress tracking. Ensure equitable transitions, focusing on MSMEs and regional development.
\end{enumerate}

Implementation could halve power generation costs via solar/wind while boosting GDP by 50\% through hydrogen exports.

\section{Conclusion}
Backed by analytical evidence and policy insights, Oman is likely the best Middle Eastern country for smart, mid-term clean energy investments—not due to immense wealth, but intelligent scarcity. Future regional competition will center on knowledge, networks, storage, and energy management. If played right, Oman can shift from periphery to center.

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