Iranian President Hassan Rouhani (R) greets Oman’s Sultan Qaboos bin Said al-Said (L) at the presidential palace in Tehran, Iran on August 25, 2013. (EPA)

By Track Persia – February 24, 2018

Iran and Oman have been enjoying close ties over the years. It was Oman in March 2013 succeeded in mediating between Iran and the US over Tehran’s disputed nuclear project which is controlled by the co-ruling Islamic Revolutionary Guard Corps (IRGC).

Secret talks between Iranian and US diplomats began in Muscat before end-March 2013. The mediation resulted in the July 2015 nuclear agreement between Iran and the US-led 5+1 powers. Iranian President Hassan Rouhani praised Muscat’s “constructive role” in the nuclear talks and former U.S. Secretary of State John Kerry said on April 2, 2015, that Oman “not only hosted a number of important meetings but also played a critical role in getting these talks off the ground in the first place”.

Oman’s Sultan Qaboos has stated his main objective that he wants to become a mediator for any power wanting to improve global relations, for resolving major disputes which could threaten world peace, and/or any other issue of importance to the international community. Qaboos is particularly keen on helping Iran improve its relations with the West and eastern powers.

However, Donald J. Trump, the anti-Iran figure who became US president in early 2016, has since been an anti-nuclear deal and relations between Washington and Tehran have reached an all-time low. Trump is strongly opposed to Tehran’s regional expansions, particularly Iran’s influences in Iraq, Lebanon, Syria and Yemen.

Once a major sea-faring power between Africa and Asia, the Sultanate of Oman under Qaboos al-Sa’id has developed a foreign policy approach based on strategic hedging for its internal stability on the one hand and mediation between states in dispute on the other. Its close relationship with Iran dating to the 1970s gives it a unique advantage as a mediator between Tehran and external states.

Sultan Qaboos in the early 1970s developed an alliance with Iran’s Shah Pahlavi monarchy. The Shah of Iran first sent troops to help Omani and British forces crush a Marxist rebellion in the south-eastern province of Dhofar. Later the Pahlavi forces helped the Omani and British troops in maintaining the peace in the sultanate.

The alliance between the two countries has been enhanced following the regime change by  Khomeini’s revolution in 1979. The two countries have increased their military cooperation over the last few years. Last April, the official Iranian news agency IRNA reported that an Iranian Navy flotilla departed for Oman to attend a joint “maritime rescue drill” in the South Sea and north of the Indian Ocean.  IRNA quoted the commander of Iran’s First Naval Zone Admiral Hossein Azad as saying: “Providing security of the ships and preparing their rescue is necessary.” It said, this year, Oman hosted one-week long joint maritime rescue drill in the South Sea and the Indian Ocean, aimed at providing security of the region.

Oman has traditionally had close business and diplomatic relations with Iran, and it is hoping for Iranian investment to help it cope with economic pressure due to low oil prices. Last year an Omani sovereign wealth fund agreed to study a proposal to build an auto plant in Oman with Iranian investment.

Under a 2008 deal yet to be executed, Oman Oil Company Exploration and Production is to develop a 45 TCF gas field on Iran’s Kish Island free zone to produce 1,000 MCF/d, with the gas to be brought to Oman by a 200-km marine pipeline. This is to involve an Indian Oil Corp as well.

With the joint venture’s ultimate capacity set at 3,000 MCF/d, the gas is to feed Oman’s liquid natural gas export venture for Iran’s account for a service fee and help meet the sultanate’s rapidly growing domestic demand. The project is to cost up to $12bn.

Last May, Oman’s central bank signed a memorandum of understanding with the Iranian central bank to strengthen financial and economic cooperation between the two countries, the Omani institution said. The agreement is said to boost bilateral trade and include training for Iranian central bankers despite that most central banks around the world as well as major international banks have been reluctant to develop ties with Tehran because of concerns over the threat of U.S. legal action against Iran over money laundering accusations. Last April Bank Muscat, Oman’s largest bank, said it had received all regulatory approvals to open a representative office in Iran.

Despite there is a cold war between Iran and each of the US, the EU, and the Saudi-led Arab/GCC alliance, Muscat remains on excellent terms with all parts of the world.

The Omani Foreign minister Yusuf bin Alawi was quoted in an interview with BBC Arabic as saying that: “Oman has strongest relations with Iran on the basis of cooperation and friendship” considering “the conflicts between Iran and Saudi Arabia are not permanent and they are just different views which quite natural in regional developments.”

Oman still has not confirmed Saudi concerns about Iranian-supplied missiles fired by Houthi rebels from northern-western Yemen. Being a Gulf Co-operation Council (GCC) member and avoiding to take the side of the most powerful GCC members against Iran, particularly over the situation in Yemen where Iran is accused of supporting its Zaidi Shi’i proxies of the Houthi clan, is not an easy situation,   How long Oman can maintain its neutral stand on Yemen crisis depends on the extent of the tensions between the adversaries and the developments of the crisis on the ground.

About Track Persia

Track PersiaTrack Persia is a Platform run by dedicated analysts who spend much of their time researching the Middle East, in due process we fall upon many indications of growing expansionary ambitions on the part of Iran in the MENA region and the wider Islamic world. These ambitions commonly increase tensions and undermine stability.