Stock Oman Muscat skyline
Oman needs oil at about $61 a barrel to balance its books. Image Credit: Shutterstock

Oman posted a budget surplus of $545 million in the first two months of this year, helped by higher oil prices and tax collection.

The surplus compared with a deficit of 457 million rials ($1.2 billion) a year ago, according the Gulf nation’s finance ministry. Net oil revenue jumped 81 per cent to 1.1 billion rials at the end of February.

Oman, which needs oil at about $61 a barrel to balance its books, has implemented a series of reforms to bridge the budget gap and lower its debt, including the introduction of a 5 per cent value-added tax last year. The finance ministry in January projected a budget deficit of $3.9 billion for this year, based on oil prices at $50 a barrel.

Oil’s surge on the back of Russia’s attack on Ukraine has pushed crude above the break-even level for almost all the Middle East’s producers. Oman plans to use the windfall to trim its debt and boost spending on projects, its ruler said last month.

S&P Global Ratings last week raised Oman’s credit ratings by one notch to BB-, with a stable outlook, due to higher oil prices, rising hydrocarbon production, and the government’s fiscal reform programme.