In 1999, Oman's exports amounted to US$7.2 billion and its imports were valued at US$5.4 billion. The country's principal export is oil and in 1999 the commodity accounted for 76 percent of all exports. In the 1980s, however, oil accounted for over 90 percent but its share has declined due to the falling price of crude oil. The second major export in Oman is re-exports which totaled US$1.3 billion in 1999. Given that the Omani economy is not very diversified, the smallest proportion of exports is non-oil exports such as foodstuffs and animal products. These accounted for 35 percent of total non-oil Omani exports in 1999. In 1999 the principle importer of Omani crude oil was Japan. Japan imported a total of 95.8 million barrels followed by Thailand, which imported 65.6 million barrels.
Oman has slowly increased its production of crude oil and as a result the country has enjoyed trade surpluses throughout the last decade even though it has increased its imports. Nevertheless, the size of these surpluses varies considerably from year to year due to the world prices of crude oil. When Iraq invaded Kuwait in 1990 the price of oil increased substantially and that year Oman's trade surplus amounted to US$2.9 billion. However, when world oil prices fell drastically in 1998, Oman's surplus fell to just US$291 million. In 1993 the
|Trade (expressed in billions of US$): Oman|
|SOURCE: International Monetary Fund. International Financial Statistics Yearbook 1999.|
surplus stood at US$1.3 billion and in 1996 the rise in the price of crude oil pushed it up to US$3 billion.
Over the past 30 years, Oman has come to rely more and more on imports because it has a very small industrial sector and an agricultural sector that is unable to meet the demand for the variety and quantity of food that the middle-and upper-class Omanis desire. Imports of food amounted to 14 percent of the total value of imports in 1999. The bulk of imports come from the United Arab Emirates and Japan, representing 26.3 percent and 15.8 percent of all imports, respectively. Major Omani imports include food and live animals, beverages and tobacco, crude materials, and minerals. In 1999, Oman's imports totaled US$4.67 billion. Oman's main trading partners are Japan, China, Thailand, South Korea, the United Arab Emirates, and the United States.
In October 2000 the General Council of the World Trade Organization approved Omani membership and in November Oman became the 139th member. Prior to its accession, Oman had to make several changes in order to conform to WTO's membership rules. Not only did the authorities have to agree upon a custom duty ceiling, allow foreign firms with under 70 percent foreign ownership to be taxed the same rates as Omani firms, but also it had to establish intellectual property rights. The consequence of this new membership will open up the Omani markets further and expose local companies to increased competition. By 2003, Oman is required to allow fully foreign-owned computer companies, banks, and insurance companies to operate within the country.