Oman: Neutrality under pressure

The Sultanate of Oman has always taken care to maintain a balance in its relations with Saudi Arabia and Iran, which has enabled it to act as a mediator in regional disputes.

However, this independence may be compromised by the mounting geopolitical tension, particularly after the US withdrawal from the agreement on Iran's nuclear programme, and all the more so as the sultanate has its own problems on the home front.

"Confrontation is not in the interest of any of the parties involved," the Omani foreign minister declared on 18 May 2018 in a press release reacting to President Donald Trump's announcement that he was withdrawing from the agreement on Iran's nuclear programme.

The sultanate had played a key role in the conclusion of that historic agreement by playing host to the secret negotiations between the USA and Iran.

Caught in the middle of the rivalry between Iran and the Sunni countries of the Gulf, Oman has tried its best to maintain a balance, hoping the agreement would defuse the tensions in the region. In vain. The US withdrawal has dashed all hopes of mediation and placed Oman at the centre of the escalation.

The role of the go-between with Iran

Neutrality and mediation are constants of Omani foreign policy. Ever since he ascended the throne in 1970, Sultan Qaboos has sought to pacify relations between the countries of the region, a policy which results from the history of the sultanate and its singular geographic location.

Its small size and its position on the Strait of Hormuz through which some 40 percent of the world's hydrocarbon shipping travels, and just a few kilometres from the Iranian coastline, make it especially sensitive to regional tensions and the hegemonic temptations of its powerful neighbours.

Oman has tried its best to maintain a balance, hoping the Iran nuclear deal would defuse the tensions in the region

Ever since the Gulf Cooperation Council (GCC) was created in 1981, Oman has constantly warned its fellow members against making the organisation an anti-Iranian coalition.

Fearing excessive Saudi influence, the Sultanate has tried to maintain an arms-length relationship with the GCC, voicing reservations in particular about the plans for unification and a common currency.

In its foreign policy, the sultanate has on several occasions distanced itself from its neighbors by taking very independent stands. It is for example the only Gulf country to have maintained diplomatic relations with Bashar al-Assad's Syria after the Arab Spring, and the only one to have refused to join the Arab coalition forces in Yemen, led by Saudi Arabia.

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Nor did it adopt the Qatar boycott, and instead stepped up its trade relations with that the blockaded country.

But it is regarding Iran that Oman's foreign policy differs the most from that of its Gulf allies.

Indeed, the two countries have enjoyed a privileged relationship ever since the Shah helped the Sultan put down the Dhofar Rebellion in the 1970s.

The links between them have gone from strength to strength. Since 2014, Tehran and Muscat have regularly held joint manoeuvres in the Strait of Hormuz and have signed many economic and energy cooperation agreements.

Thanks to this special relationship, Oman has been able to play the vital role of the conduit between Iran and the Arab countries of the region, notably during the Iran-Iraq war, and later during the secret negotiations between Tehran and Washington which led to the signing of the agreement on Iran's nuclear programme on 14 July 2015.

Oman has also hosted several secret negotiations concerning the conflicts in Syria and Yemen.

The ambitions of the United Arab Emirates

Saudi Arabia and the United Arab Emirates cast a jaundiced eye on the cordial relations which Oman maintains with Iran and Qatar. Indeed, they feel that Muscat does not take adequate account of their security concerns, in particular by allowing the weapons supplied by Iran to the Houthis in the Yemeni civil war to transit through their territory.

The Europeans should not neglect to support those who could be its natural allies in the region

Saudi Arabia and the Arab Emirates have lately stepped up their political and economic pressure on the sultanate to force it into line.

King Salman's decision in December 2016 not to attend the GCC summit in Oman already illustrated the cooling of relations between the two countries. One also hears talk in Oman of economic pressures which take the form of delays in signing this or that contract, or added constraints on trans border trade. In particular, the Emirates are said to have made every effort to slow down the construction of the rail line between Oman and the other GCC countries, which has had a negative impact Omani firms.

Similarly, Omanis are quite worried about the regional ambitions of the Emirates, which they have dubbed "little Sparta," whose increased activity throughout the region makes them feel more and more surrounded.

Indeed, Emirati troops have made huge advances in Yemen, in the Mahrah region along the border with Oman and around the southern port cities like Mocha, Aden, Mukalla and Socotra.

The Emirates have also projected their presence as far as the coast of the Horn of Africa and the Indian Ocean. Their increased investments in Oman itself, in the Al Batinah border region and on the Musandam Peninsula have the Omanis worrying about an economic and political takeover. Will they have to turn to China and India?

In the face of this increase of Emirati power in the region, Oman is trying to take better advantage of its strategic position to ensure its economic independence.

Indeed, the Gulf has in recent years become a locus of exacerbated competition for control of the trade routes between Asia and Europe.

China has made many of the harbours in the region focal points in its plans for a new Silk Route. It has invested massively for several years now in the development of Dubai, Gwadar in Pakistan, Chabahar in Iran but also Duqum and Sohar in Oman.

By the same token, this strategy has enabled it to secure its access to the hydrocarbons on which it is so heavily dependent - indeed, China is the number one buyer of oil and gas in the region.

Above all, Oman appears to be increasingly fragile economically and politically

India as well is seeking to assert its presence. A glance at the map shows that Oman has the potential to occupy a strategic position. The ports of Sohar and Duqum in particular could enable ships to avoid the highly sensitive Strait of Hormuz and connect directly with the Arabian Peninsula by rail.

The massive Chinese investments in the Sino-Omani industrial zone in the port of Duqum are a sign that China is fully aware of the Omani potential.

Similarly, only a few days after President Trump's withdrawal from the nuclear agreement, the Omani foreign minister Yusuf bin Alawi met with his counterpart in Beijing to reconfirm the economic and political cooperation between the two countries.

However, the Omani harbours have a long way to go before they can compete with the Emirati installations at Jebel Ali and Khalifa Port.

But above all, Oman appears to be increasingly fragile economically and politically. The US withdrawal from the Iranian nuclear agreement may call into question its plans to develop trade relations with Iran.

The project for a pipeline between India and Oman via Iran may also be compromised. Added to which are the consequences of the drop in oil prices on the country's domestic stability, since 80 percent of the national income depends on hydrocarbons. With youth unemployment at 49 percent, and a budget deficit at 21 percent, there is a major risk of social unrest.

Up till now, his popularity has enabled Sultan Qaboos to nip any nascent protests in the bud, but his illness and the lack of a legitimate heir to the throne leave many unanswered questions regarding the future of the sultanate.

Read more: Oman: Between Iran and a hard place

These economic difficulties are going to make Oman increasingly dependent on the investments of its powerful neighbours and as a result more vulnerable to outside pressures. Thus far, the sultanate has been very reluctant to accept financing from countries of the region for fear this would diminish its political independence.

Nonetheless, in January 2018 it did accept US$210 million from Saudi Arabia for the development of the harbour at Duqum, in what seemed an infringement of this principle.

While Europe strives to save what it can from the Iranian nuclear agreement, it should not neglect to support those who could be its natural allies in the region. Helping Oman to maintain an independent and balanced foreign policy is essential for the interests of Europe.

Camille Lons is the MENA programme officer with the European Council on European Affairs, where this piece originally appeared.

Follow her on Twitter: @CamilleLons

This article was originally published by our partners at Orient XXI

Opinions expressed in this article remain those of the author and do not necessarily represent those of The New Arab, its editorial board or staff.