Most observers of the current nuclear negotiations with Iran have focused on the scope and timing of sanctions relief. Tehran insists that sanctions be immediately lifted once a final deal is reached; Washington seeks a gradual phase-out. Lost in the discussion is the fact that few countries have as much at stake in the outcome as Oman. For this state on the horn of the Arabian Peninsula, the diplomatic and economic risks are high.
Oman’s leader, Sultan Qaboos bin Said, has been at the forefront of mediations between Tehran and Washington for the past decade, helping broker the interim nuclear agreement in November 2013. His involvement can be directly attributed to Oman’s historic relationship with Iran, which includes the Shah’s support to help quell the Dhofar rebellion in 1962–76 and his support for Qaboos’ bloodless palace coup, in which his father was ousted, in 1970. In addition, Iran and Oman look to substantially expand trade links following the lifting of Western sanctions, which would unlock significant economic rewards for both.
Energy plays a large part in this calculus. In March 2014, the two states struck a landmark commercial agreement during Iranian President Hassan Rouhani’s visit to Muscat. Under the pact, Tehran will export 350 billion cubic feet of gas per year to Oman starting in 2015, via a strategic 420-mile gas pipeline under the Persian Gulf. The deal, which will last for 25 years, is estimated to be worth $60 billion. Separately, Iran announced its intentions to invest $4 billion in Oman’s new port at Duqm and promised to do the same with several other infrastructure improvement projects.
Each side stands to reap significant rewards from a closer partnership: Iran eyes Oman as a stepping stone to the African markets, and Oman wants to become a transit point for trade through Iran to the landlocked states of Central Asia.
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Economic considerations alone, however, do not fully explain Oman’s approach. At its core, Omani foreign policy is aimed at preventing either Iran or Saudi Arabia—two longtime rivals—from acquiring disproportionate leverage over the region. This strategy has not only protected Oman from its larger neighbors and regional turmoil but also allowed it to focus on its own development; over the past 40 years, the country has grown from an impoverished nation into a modern economy. Omani authorities view the task of protecting the country’s $80-billion economy and sustaining its hard-won growth as fundamental to political stability.
Now, with the opening to Iran, Oman is pursuing a delicate balancing act: its role as Iran’s only friend in the Gulf Cooperation Council (GCC) is matched by close defense cooperation with its Western allies and GCC partners, including Saudi Arabia, with whom it shares intelligence under the GCC counterterrorism treaty.
These considerations explain why Oman became the only member of the GCC to opt out of the Saudi-led military campaign to battle Yemen’s Houthi rebels, whom many see as Iranian proxies. This policy is not without its challenges; Saudi Arabia has grown leery over Oman’s pursuit of closer ties with Iran and its decision to openly oppose a closer GCC union, which would have helped strengthen Riyadh’s regional standing.
On the whole, however, Oman’s neutral stance has given it a key role to play in the region: that of a mediator. In 2007, Qaboos drew on his long-standing relationships with London and Tehran to successfully fight for the release of 15 British navy personnel captured by Iran. In 2011, he was central in mediating the release of three American hikers, whom Iran accused of espionage. Qaboos’ ability to bring Washington and Tehran to the negotiation table in 2013 was therefore not a surprise.
Yemen may become the most difficult test of Oman’s mediating ability yet. It remains to be seen whether Muscat can bring Tehran and Riyadh together to discuss what might be the gravest threat to regional security: the seemingly endless Iranian-Saudi proxy rivalries, for which Yemen is just the latest staging ground. One place to start would be facilitating back-channel talks between foreign stakeholders and Yemen’s various competing local factions. Oman’s alliance with the United States and its friendly relations with both Saudi Arabia and Iran could help in that matter.
At its core, Omani foreign policy is aimed at preventing either Iran or Saudi Arabia from acquiring disproportionate leverage over the region.
Delaying such efforts was the fact that Qaboos was out of the picture for eight months, receiving medical treatment in Germany until this March. Now that he’s back, he could reclaim his role as a regional intermediary. It is telling that in early April, the Iranian Foreign Minister Mohammad Javad Zarif chose Muscat as his first stop in a regional tour to shore up support for a political compromise to end the Yemeni conflict.
Beyond gentle mediation, however, Oman is unlikely to voluntarily place itself in the middle of Saudi-Iranian tensions. Instead, the Sultanate is likely to pursue a three-pronged approach: leveraging its standing as a neutral party to become the principal bridge between Iran and the GCC countries while bolstering its economic cooperation with Tehran and stepping up security cooperation with the West.
Also driving Oman’s calculus is ideology. In Oman, Ibadi Islam, a conservative sect that is neither Shiite not Sunni, is predominant. Oman has always been anxious about Saudi Arabia’s religious and political influence in the region—a concern it shares with Iran. Both Iran and Oman therefore view their close ties as an insurance policy against Saudi Arabia’s growing clout and the spread of Salafi ideology.
Oman’s neutral foreign policy is likely to be on the agenda when GCC leaders meet with U.S. President Barack Obama May 13–14 in the United States. From Washington’s standpoint, Oman’s link to Iran has proved to be expedient, whereas Oman’s fellow GCC partners are far more ambivalent. But Muscat is highly unlikely to shift its course at this juncture, and its close relations with Washington do not depend on it.
When it comes to security cooperation, Washington’s ties with Oman fall within the framework of the U.S.-GCC defense policy. As part of an effort to protect the freedom of navigation through the Straits of Hormuz, Oman’s navy carries out annual bilateral exercises with its U.S. counterparts in addition to annual multilateral exercises with France, the United Kingdom, the United States, and the GCC. In recent years, Washington has also been helping the Omani government expand the runways of the Seeb International Airport, allowing the largest U.S. military aircrafts to land safely. More than $1 billion worth of U.S. air force equipment is believed to have been stored at Seeb. Once the airport’s new terminal is completed, it will be able to receive 12 million passengers a year, in addition to accommodating 12 F-16 multi-role fighter planes recently purchased from the United States. Separately, in 2013, Oman announced a $2.1 billion purchase of U.S. air-defense systems.
But these security ties with the United States would hardly deter Oman from continuing to balance between Iran and Saudi Arabia. The major risk, of course, is a total breakdown in Iranian nuclear negotiations, which would disrupt the fledgling Iran-Oman partnership. That development would certainly make it hard to proceed on its joint pipeline proposal and other strategic economic projects. It might even force Oman to begrudgingly reassess its outreach to Iran altogether.