Oman & Italy: partnership of opportunity

Observer

3 days ago

The Sultanate of Oman and the Italian Republic are leveraging deep historical and diplomatic connections to cultivate a dynamic economic partnership. Rooted in ancient trade routes and centuries of mutual respect, this enduring relationship fosters a stable environment for long-term projects, notably in cultural heritage and strategic infrastructure, by mitigating investor risks and promoting shared commercial interests.
Formal diplomatic relations began in the early 1970s, solidified by Italy's 1975 embassy opening in Muscat. Ongoing high-level engagements and Italy's appreciation for Oman's mediating role in international dialogues underscore a strategic alignment beyond economics. This diplomatic depth enhances Oman's global standing and ensures a stable environment crucial for attracting foreign investment, while strengthening Italy's role as a key European partner in the Gulf.
Recent bilateral trade between Oman and Italy has seen significant expansion, reaching €708.9 million in 2024, a 31% increase and a 30.6% annualised growth over five years. Omani exports to Italy notably more than doubled from €103.9 million in 2023 to €243.4 million in 2024, indicating diversification potential. While Italy maintained a considerable surplus with €692.3 million in exports to Oman, NCSI (National Centre for Statistics and Information) data for 2024 shows Oman's trade deficit with Italy exceeding RO 32 million.
Oman's exports, mainly unwrought aluminiums and ferro-chromium, reflect its industrial strength, while Italy's exports of industrial components, machinery, and tools (totaling approximately RO 40.07 million in imports for Oman) highlight its role as a technology supplier.
This complementary trade structure points to significant opportunities for investment, joint manufacturing, and technology transfer to boost Oman's value-added production. Italy is tourist attracting country, with 57 million attracted in 2023, one of Oman's top agenda is to boost tourism. There is some synergy in this field. Italian tourists are attracted to Oman, some agencies hire chartered flights.
16 FF Oman&Italy-A Partnership of Opportunity
The convergence of Oman's national development agenda, Vision 2040, with Italy's advanced industrial and technological capabilities, creates a fertile ground for strategic investment and business opportunities across multiple sectors. Oman Vision 2040 prioritises economic diversification, carbon neutrality, and an increased contribution from the private sector. Italy, with its strengths in green technologies, advanced engineering, and sustainable development, is uniquely positioned to support these goals.
Key sectors for enhanced collaboration include the energy transition, particularly green hydrogen, where Oman plans ambitious investments, with Italy offering innovation and expertise. Opportunities also exist in advanced oil and gas technology, as Oman actively seeks foreign expertise in sophisticated drilling, hydraulic fracturing, and enhanced oil recovery (EOR) technologies. Italian companies like ENI and Saipem are already well-established in this sector in Oman.
Infrastructure and construction present significant demand for Italian expertise, equipment, and services, driven by Oman's Vision 2040 mega-projects like the Duqm Refinery and the expansion of Muscat International Airport.
Italian technical expertise is also highly sought after in technology and innovation, aligning with Oman's long-term development strategy. Oman's burgeoning tourism sector, emphasising eco-tourism, cultural preservation, and sustainable development under its Tourism Vision 2040, offers significant opportunities for Italian companies specialising in sustainable tourism development and cultural heritage management.
Italian archaeological and restoration knowledge has already greatly benefited Omani heritage projects. Oman also presents a consistent market for premium "Made in Italy" products across fashion, footwear, jewelry, luxury goods, and shipbuilding.
Furthermore, opportunities in water and waste management align with Oman's sustainable development goals, offering further avenues for collaboration. Exchange of students can be an area. Oman armed forces and security forces use Italian equipment. A possible area of FDI
Both nations stand to gain substantially. Oman benefits from Italian technical expertise, technology transfer, and accelerated sustainable development for a more diversified economy. Italy gains energy security through access to Oman's natural resources, including future green hydrogen, and leverages Oman's strategic gateway to GCC, Indian Ocean, and East African markets, aligning with initiatives like the "Mattei Plan for Africa."
This partnership drives significant two-way investment, impacting both private sectors. The Oman Investment Authority's (OIA) successful real estate investment in Milan, yielding a 50% return, signals Oman's growing capacity for outward investment into European markets and a shift towards sophisticated capital flow, strengthening its global financial footprint. Italian businesses are also increasingly investing in Oman, drawn by Vision 2040's focus on high-growth sectors and investor-friendly reforms.
To foster direct business connections, both governments, particularly Italy, have implemented proactive measures. The Italian Trade Agency (ICE/ITA) has bolstered its presence in Oman, reopening its Country Desk in Muscat and launching its first official national pavilion at Oman Sustainability Week 2025. These initiatives facilitate crucial networking, fostering new commercial partnerships and supporting market entry for Italian SMEs by lowering informational and logistical barriers, thus driving broader private sector collaboration.
In conclusion, the Oman-Italy relationship is positioned for deeper and more diversified cooperation, built upon a strong historical foundation, dynamic growth, and significant strategic alignment. The complementary economic structures, coupled with shared commitments to sustainable development, create powerful synergies that directly support Oman Vision 2040 and Italy's strategic interests.
By consistently leveraging their historical trust, strategic alignment, and robust institutional frameworks, both nations can continue to build a model of sustainable and mutually beneficial international collaboration, contributing to their respective national development goals and broader regional stability.