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Oman’s evolving oil strategy is placing greater emphasis on maximising the economic value of each barrel rather than focusing solely on production and export volumes, as changing global market conditions reshape the economics of energy trading.
According to figures reported by Oman Observer, the Sultanate’s oil production increased by 11.9% to approximately 270 million barrels during the first eight months of 2026. However, crude oil exports grew by just 1.9% to around 209 million barrels, while refinery output declined by 2.4% to approximately 150 million barrels.
Ali bin Abdullah Al Riyami, former Director General of Marketing at the Ministry of Energy and Minerals, explained that the difference between production and export growth cannot be attributed entirely to increased domestic refining.
Factors including domestic consumption, refinery feedstock requirements, inventory movements and the timing of export shipments all influence the relationship between production and exports.
Al Riyami emphasised that Oman’s long-term energy strategy increasingly centres on generating greater value from its hydrocarbon resources.
The Duqm refinery illustrates this direction. According to Al Riyami, the facility has been operating at approximately 255,000 barrels per day in 2026, equivalent to around 110% of its designed capacity of 230,000 barrels per day.
However, higher refining volumes do not automatically translate into stronger economic returns.
The decision to refine crude oil or sell it directly depends on prevailing market conditions, refining margins and demand for petroleum products such as diesel, aviation fuel and naphtha.
When refining margins are favourable, converting crude into higher-value products can generate stronger returns. Conversely, direct crude exports may offer better commercial outcomes when international crude prices and market conditions are more attractive.
This approach highlights the importance of flexible marketing strategies that direct oil towards the most profitable markets and applications.
The international oil market is also facing increasingly complex challenges extending beyond conventional supply-and-demand dynamics.
Drawing on nearly three decades of experience in oil marketing, Al Riyami observed that previous market disruptions were frequently driven by identifiable factors, including weak demand, oversupply or geopolitical developments.
In 2026, however, the challenges are more interconnected.
Geopolitical uncertainty, shipping disruptions, higher freight and insurance costs, changing tanker routes and regional imbalances in refined product availability are influencing both energy prices and supply security.
These developments mean that the availability of crude oil alone is no longer sufficient to guarantee market stability. The ability to transport energy efficiently, manage storage capacity and respond to shifting demand has become equally important.
For producing countries such as Oman, this creates a stronger commercial case for integrated supply chains, diversified export destinations and responsive energy marketing strategies.
Oman’s combination of upstream production, refining capacity, storage infrastructure, ports and strategic geographic positioning offers opportunities to expand its role beyond traditional crude oil exports.
An integrated commercial strategy could enable the Sultanate to optimise how its energy resources are produced, processed, stored, transported and marketed.
Such an approach would strengthen the connection between Oman’s energy infrastructure and international trading opportunities, potentially improving economic returns across the hydrocarbon value chain.
The emphasis is therefore shifting from measuring success primarily through production volumes towards evaluating profitability, market access and value creation.
Al Riyami also cautioned against viewing prolonged periods of exceptionally high oil prices as inherently beneficial for producing countries.
Although higher prices can improve export revenues in the short term, sustained price increases may contribute to inflation, weaken global economic growth and ultimately reduce demand for petroleum products.
A more stable market, supported by prices that remain commercially viable for producers and manageable for consumers, offers stronger prospects for long-term sustainability.
For Oman, the wider implication is clear: the future competitiveness of its oil sector will depend not only on production capacity, but also on the ability to extract maximum economic value through refining, logistics, market intelligence and strategic trading decisions.
As global energy markets become more interconnected and unpredictable, the value generated from each barrel is emerging as a more meaningful measure of commercial performance than production volume alone.
Value per barrel matters more than volume - Oman Observer
