Non-OPEC member Oman produced 358mn barrels of oil in 2015, marking a 4% annual expansion, while exports rose 6% to 308mn barrels (86% of the total), the statistics office reported.

Higher oil output, following a period of stagnation, is good news for the government amid falling hydrocarbons prices and the related negative impact on the fiscal balance.

In 2015, however, the price of Omani oil plunged 45.3% to an average of $56.5 per barrel, thus weighing heavily on the state budget.

Crude oil output grew 3.4% y/y to 323mn barrels last year while that of condensate increased 10% y/y to 35mn.

China imported the bulk of Omani oil output at 238mn barrels in 2015 up 13% and Taiwan followed at 28mn barrels

As to natural gas production, it rose 5.6% y/y to 39.8bn cubic meters in 2015.

The increase was attributed to rising usage of natural gas in power generations oil fields and industrial projects.

Plummeting oil income pushed Oman’s state budget into an OMR323mn ($840mn) deficit in October last year, swinging from an OMR54mn surplus the year before, amid high base effects, according to the latest data from the statistics office.

A period of sustained low oil prices will dampen Oman's fiscal and external balances more than previously expected, pushing Standard & Poor’s to recently lower the kingdom’s long-term foreign and local currency sovereign credit ratings to BBB+ from A- while affirming the short-term ratings at A-2.

The ratings have negative outlooks, reflecting S&P view that the government's fiscal and external positions could worsen beyond its current expectations over the next two years. S&P also assessed Oman as “having insufficient fiscal and external strength to offset the concentration of its economy in the hydrocarbons sector and the resulting volatility.”

S&P warned that the government has “limited room for spending cuts, given that nearly 50% of spending relates to public-sector wages and subsidies and exemptions, which are typically difficult to reduce.”

As to Oman’s external position amid falling oil windfall, S&P forecast the sultanate to run a current account deficit in 2015 of nearly 14% of GDP. The current account deficit will remain in double digits until 2018.