Iran Finding New Trade Hub in Oman

EghtesadOnline: Can Oman become the new hub for the reexport of Iranian products? The head of Iran-Oman Chamber of Commerce, Mohsen Zarrabi, believes so.

News ID: ۷۴۸۵۶۴

29 September 2019

“The two countries’ economic transactions, however, have not been commensurate with their political ties over the past years due to the lack of infrastructures,” he said.

Zarrabi said the formation of Iran-Oman Chamber of Commerce in January 2014, though, helped improve the two neighbors’ annual trade from $221 million to $1.16 billion last year (March 2018-19), according to Financial Tribune.

“Key developments in their economic landscape over these years include the creation of shipping routes, operation of regular fights, facilitating the process of getting commercial visas, making residency and company registration, as well as expansion of banking relations,” he was quoted as saying by the Persian daily Donya-e Eqtesad.

Latest figures show the value of trade between Iran and Oman has increased to $870 million during the first seven months of 2019 (Jan.-July) from $557 million in the same period of last year.

The number of Iranian companies registered in Oman was 263 in 2014, which increased to 1,163 by the end of 2018, Mehr News Agency reported.

“With a population of about five million and imports worth $20 billion, Oman has the potential to become a very good market for Iranian products. Iran’s share of Oman’s imports has improved from 0.7% in 2014 to 3.6% last year. It is possible to increase this share to 10%,” Zarrabi said.

“Despite the fact that some countries offer good markets, Iranians have been stripped of much of their capacity revenues from exports due to poor political relations. Oman is a suitable place for the reexport of our products.”

The official noted that Iranian exporters will forge better ties with African countries through Oman, given the fact that the neighboring country has age-old, strong relations with those countries.

“Yemen, with a population of 28 million, is Oman’s neighbor to the west. Arab countries usually make long-term purchases. Iranians will be able to use letters of credit to export to these countries under the franchise of Omani companies,” he said.

Iranian companies now prefer to conduct trade with Oman rather than the UAE, which has long served as a backdoor trade route for Iran during the years of international sanctions, as the UAE is now complying with US sanctions.

“Oman has bilateral free trade agreements with 16 Arab, African and American countries, as well as Singapore and four European countries [Switzerland, Liechtenstein, Norway and Sweden]. Iran will be able to export its products via Oman to these countries and enjoy their zero import duty,” he said.

"Oman’s modern ports could act as transshipment hubs for Iran’s imports, replacing ports that adopted a hostile attitude toward Iran after the reimposition of US sanctions.”

Zarrabi noted that one of the major economic goals pursued by Oman is to improve its tourism industry from the current annual three million to 10 million.

"The country has carried out detailed planning to achieve this goal and hired consultants from an experienced Spanish company. The realization of this goal would free up capacities for the presence of tourists in Iran, thanks to the proximity of our country to Oman. A joint plan between Iran’s private sector and Oman would help put together a package for tourists eager to visit both Oman and Iran,” he said.

“Iran-Oman Chamber of Commerce is planning to improve trade between the two countries to $5 billion. The figure includes reexports and re-imports as well as fisheries, tourism, health tourism and exports of technical and engineering products.”

The Iranian government recently approved a bill to offer permanent visa-waivers to Omani citizens to increase interactions between the two countries.

In a session held in Tehran, the Iranian Cabinet approved a proposal to permanently abolish visa requirements for Omani nationals visiting Iran.

The government made the decision in light of the friendly relations between the two nations and also in line with the reciprocal action of Omani government for easing the issuance of visa for Iranian nationals, Fars News Agency reported.