Oman is a country full of contrasts. Contrary to common stereotypes, Oman is far more than just desert. It captivates with mountains soaring over 3,000 meters above sea level, lush green valleys and stunning oases, access to both the sea and the ocean (in fact, Oman’s coastline stretches over 3,000 kilometers), and a mix of rocky and sandy shores, as well as monsoon regions. Oman is also a major point on the global diving map, recognized as one of the most beautiful diving destinations in the world. The country shares a fascinating maritime history — it was once a powerful seafaring nation that controlled trade routes across the Arabian Gulf and the Indian Ocean. Oman — more specifically, the Dhofar region — is also the world capital of frankincense production, made from the resin extracted from the Boswellia sacra tree. [1] [2]
So, what can we say about energy in Oman?
Like other Arab countries, Oman is closely associated with oil. And indeed, there is plenty of it to be found. Oman is the largest producer of oil and gas in the Middle East that is not a member of the Organization of the Petroleum Exporting Countries (OPEC). [3] In January 2025, Oman produced 987,500 barrels of oil. [4] According to data from June 2022, the country’s proven oil reserves stood at 5.2 billion barrels. [5] As for natural gas, Oman produced 4,604,300 cubic meters of gas in January 2025. [4] In June 2022, Oman’s gas reserves were estimated at 24 trillion cubic feet, [5] which equals approximately 679,604,318,208 cubic meters. While these are impressive numbers, they don’t place Oman among the world’s top 10 producers of oil or gas. Still, these resources account for 70% of the country’s annual budget. [5]
Towards Energy Transformation…
Oman’s energy mix is still primarily based on oil and gas. Other sources of energy play only a marginal role, though Oman has now embarked on its journey towards renewable energy and a broader energy transformation. As of 2023, Oman’s energy mix looks as follows:
Oman, like the United Arab Emirates and Saudi Arabia, is on a path towards the development of renewable energy sources.As part of the Oman Vision 2040 initiative, the country aims for a renewable energy share of 11% in its energy mix by 2025 and 30% by 2030. To achieve these targets, Oman is implementing large-scale solar and wind power projects. [6] Completed projects include the 50 MW Dhofar 1 wind power plant, the 500 MW Ibri 2 wind farm, and two major solar photovoltaic projects – Manah 1 and 2, launched in 2025, which added an extra 1,000 MW of capacity. Between 2027 and 2029, Oman plans to execute additional renewable energy projects that will bring in 2,300 MW more into the national grid. [7]
Oman’s work on harnessing the power of ocean waves is particularly fascinating. These ambitions are being realized in collaboration with Havkraft AS, a leading player in marine energy technologies. In 2013, Havkraft developed the Havkraft Wave Energy Converter, a device that captures energy from ocean waves and is adaptable to a variety of wave environments across the globe. [8] Now that’s what you call riding the wave!
Oman’s energy transformation is not only about wind and solar, but also about hydrogen. The country has set ambitious goals in the green hydrogen sector, planning to produce 1–1.25 million tons annually by 2030. [6] The entity leading the country’s hydrogen strategy is Hydrom, established in 2022, [9] and owned by Energy Development Oman – a state-owned enterprise. [10]
The Energy Market in Oman
Historically, Oman’s energy sector—like other Gulf countries—was vertically integrated and state-owned, with monopolies covering generation, transmission, and distribution of electricity. However, Oman is now making significant moves toward liberalizing the energy market. The power and water sector is divided into three separate systems: Main Interconnected System (MIS), Rural Areas Electricity Company (RAEC), Dhofar Power System (DPS). [11]
Here’s how the energy sector in Oman is structured:
Electricity Generation. All power generation companies in Oman (except RAEC) are fully private and selected through competitive bidding. RAEC, a public company, provides electricity in areas not connected to MIS or DPS. In MIS and DPS areas, Nama Power and Water Procurement (NPWP) pays electricity and water producers under PPA agreements and charges grid connection fees via Oman Electricity Transmission Company (OETC).
Electricity Transmission. OETC is the monopoly provider of transmission services for MIS and DPS. It owns and operates the 400kV, 220kV, and 132kV grids and is responsible for system operations and dispatching power generation and desalination plants.
Electricity Distribution. The final stage of electricity delivery, distribution lowers the voltage and delivers electricity to end-users. There are two licensed companies: Nama Electricity Distribution Company and Dhofar Integrated Services Company. These pay OETC for grid usage.
Electricity Supply. Nama Supply Company handles billing and electricity supply in MIS, while Dhofar Integrated Services Company performs this function in DPS. They pay OETC for transmission and distribution, and purchase electricity in bulk from NPWP under the Bulk Supply Tariff.
Capacity Planning. Nama Energy and Water Procurement Company forecasts power demand for the upcoming year and the following seven years. It publishes projections and plans future purchases, including from renewable sources, ensuring cost-effective procurement, often via competitive tenders. [12]
A particularly interesting and significant step toward the liberalization of Oman’s electricity market was the launch of the first electricity and water spot market in the Middle East, which took place on January 1, 2022. The entity responsible for designing the wholesale electricity spot market is Nama Power and Water Procurement (NPWP). The market rules governing the spot market are developed by NPWP under the supervision of the Authority for Public Services Regulation (APSR), in consultation with OETC and other stakeholders. The spot market operator is Oman Power and Water Procurement.
The launch of the spot market for electricity and water creates opportunities for diverse generation sources that typically do not participate in standard PPA (Power Purchase Agreement) tendering processes. It allows not only electricity producers with existing PPAs to participate, but also generators whose PPA contracts have expired, enabling them to sell uncontracted electricity at the most competitive market prices. This is particularly significant for solar and wind farms, as it helps accelerate the return on investment in renewable energy projects. [13][14]
Cross-Border Interconnections
Oman is interconnected with neighboring countries through cross-border interconnection systems. The Gulf Cooperation Council (GCC)member states are linked by a 400 kV interconnection network overseen by the Gulf Cooperation Council Interconnection Authority (GCCIA). This system includes countries such as KSA, Kuwait, the United Arab Emirates, and Qatar. One of the main objectives of this interconnection was to enhance regional energy security. The GCCIA was established in 2001, and Oman officially joined as a permanent member in 2014, actively participating in the implementation of the interconnection project. [15]
In summary, Oman’s power sector is a blend of tradition and innovation, where cutting-edge technologies are increasingly shaping the country’s energy landscape. Oman not only places strong faith in its natural resource potential, but also looks to the future with enthusiasm, investing boldly in green energy and advanced technologies.
Oman on the Path of Energy Transformation
Frankincense, Oases, Sea, Oil and Gas
Oman is a country full of contrasts. Contrary to common stereotypes, Oman is far more than just desert. It captivates with mountains soaring over 3,000 meters above sea level, lush green valleys and stunning oases, access to both the sea and the ocean (in fact, Oman’s coastline stretches over 3,000 kilometers), and a mix of rocky and sandy shores, as well as monsoon regions. Oman is also a major point on the global diving map, recognized as one of the most beautiful diving destinations in the world. The country shares a fascinating maritime history — it was once a powerful seafaring nation that controlled trade routes across the Arabian Gulf and the Indian Ocean. Oman — more specifically, the Dhofar region — is also the world capital of frankincense production, made from the resin extracted from the Boswellia sacra tree. [1] [2]
So, what can we say about energy in Oman?
Like other Arab countries, Oman is closely associated with oil. And indeed, there is plenty of it to be found. Oman is the largest producer of oil and gas in the Middle East that is not a member of the Organization of the Petroleum Exporting Countries (OPEC). [3] In January 2025, Oman produced 987,500 barrels of oil. [4] According to data from June 2022, the country’s proven oil reserves stood at 5.2 billion barrels. [5] As for natural gas, Oman produced 4,604,300 cubic meters of gas in January 2025. [4] In June 2022, Oman’s gas reserves were estimated at 24 trillion cubic feet, [5] which equals approximately 679,604,318,208 cubic meters. While these are impressive numbers, they don’t place Oman among the world’s top 10 producers of oil or gas. Still, these resources account for 70% of the country’s annual budget. [5]
Towards Energy Transformation…
Oman’s energy mix is still primarily based on oil and gas. Other sources of energy play only a marginal role, though Oman has now embarked on its journey towards renewable energy and a broader energy transformation. As of 2023, Oman’s energy mix looks as follows:
Oman, like the United Arab Emirates and Saudi Arabia, is on a path towards the development of renewable energy sources. As part of the Oman Vision 2040 initiative, the country aims for a renewable energy share of 11% in its energy mix by 2025 and 30% by 2030. To achieve these targets, Oman is implementing large-scale solar and wind power projects. [6] Completed projects include the 50 MW Dhofar 1 wind power plant, the 500 MW Ibri 2 wind farm, and two major solar photovoltaic projects – Manah 1 and 2, launched in 2025, which added an extra 1,000 MW of capacity. Between 2027 and 2029, Oman plans to execute additional renewable energy projects that will bring in 2,300 MW more into the national grid. [7]
Oman’s work on harnessing the power of ocean waves is particularly fascinating. These ambitions are being realized in collaboration with Havkraft AS, a leading player in marine energy technologies. In 2013, Havkraft developed the Havkraft Wave Energy Converter, a device that captures energy from ocean waves and is adaptable to a variety of wave environments across the globe. [8]
Now that’s what you call riding the wave!
Oman’s energy transformation is not only about wind and solar, but also about hydrogen. The country has set ambitious goals in the green hydrogen sector, planning to produce 1–1.25 million tons annually by 2030. [6] The entity leading the country’s hydrogen strategy is Hydrom, established in 2022, [9] and owned by Energy Development Oman – a state-owned enterprise. [10]
The Energy Market in Oman
Historically, Oman’s energy sector—like other Gulf countries—was vertically integrated and state-owned, with monopolies covering generation, transmission, and distribution of electricity. However, Oman is now making significant moves toward liberalizing the energy market. The power and water sector is divided into three separate systems: Main Interconnected System (MIS), Rural Areas Electricity Company (RAEC), Dhofar Power System (DPS). [11]
Here’s how the energy sector in Oman is structured:
A particularly interesting and significant step toward the liberalization of Oman’s electricity market was the launch of the first electricity and water spot market in the Middle East, which took place on January 1, 2022. The entity responsible for designing the wholesale electricity spot market is Nama Power and Water Procurement (NPWP). The market rules governing the spot market are developed by NPWP under the supervision of the Authority for Public Services Regulation (APSR), in consultation with OETC and other stakeholders. The spot market operator is Oman Power and Water Procurement.
The launch of the spot market for electricity and water creates opportunities for diverse generation sources that typically do not participate in standard PPA (Power Purchase Agreement) tendering processes. It allows not only electricity producers with existing PPAs to participate, but also generators whose PPA contracts have expired, enabling them to sell uncontracted electricity at the most competitive market prices. This is particularly significant for solar and wind farms, as it helps accelerate the return on investment in renewable energy projects. [13][14]
Cross-Border Interconnections
Oman is interconnected with neighboring countries through cross-border interconnection systems. The Gulf Cooperation Council (GCC) member states are linked by a 400 kV interconnection network overseen by the Gulf Cooperation Council Interconnection Authority (GCCIA). This system includes countries such as KSA, Kuwait, the United Arab Emirates, and Qatar. One of the main objectives of this interconnection was to enhance regional energy security. The GCCIA was established in 2001, and Oman officially joined as a permanent member in 2014, actively participating in the implementation of the interconnection project. [15]
In summary, Oman’s power sector is a blend of tradition and innovation, where cutting-edge technologies are increasingly shaping the country’s energy landscape. Oman not only places strong faith in its natural resource potential, but also looks to the future with enthusiasm, investing boldly in green energy and advanced technologies.
[1] https://www.omaniya.org/fakty-i-mity-o-omanie/
[2] https://www.omaniya.org/10-ciekawostek-o-omanie/
[3] https://www.eia.gov/international/overview/country/OMN
[4] https://www.ceicdata.com/en/country/oman
[5] https://www.trade.gov/country-commercial-guides/oman-oil-gas#:~:text=Oman%20can%20produce%20upwards%20of%20one%20million%20barrels,crude%2C%20and%20China%20is%20the%20predominant%20export%20market.
[6] https://www.omanobserver.om/article/1166674/business/omans-renewable-energy-push-gathers-momentum
[7] https://www.muscatdaily.com/2025/02/24/oman-makes-massive-push-for-renewable-energy/
[8] https://www.utilities-me.com/utilities/oman-on-track-to-develop-wave-energy
[9] https://hydrom.om/
[10] https://edoman.om/about-us/
[11] https://www.omangrid.com/en/Pages/Electricity_Sector_in_Oman.aspx
[12] https://www.apsr.om/index.php/en/market
[13] https://english.alarabiya.net/business/energy/2022/03/01/-Oman-launches-region-s-first-spot-market-for-electricity-in-Middle-East-region
[14] https://omanpwp.om/oman-electricty-market
[15] https://gccia.com.sa/about-us/aboutus/
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