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Upcoming Large Economic Projects to Link Saudi Arabia, Oman

Oman and Saudi Arabia are pushing to enhance integration and joint investment cooperation (SPA)
Oman and Saudi Arabia are pushing to enhance integration and joint investment cooperation (SPA)
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Upcoming Large Economic Projects to Link Saudi Arabia, Oman

Oman and Saudi Arabia are pushing to enhance integration and joint investment cooperation (SPA)
Oman and Saudi Arabia are pushing to enhance integration and joint investment cooperation (SPA)

Abdulsalam Al Murshidi, the executive president of the largest sovereign wealth fund of the Sultanate of Oman, has affirmed that economic ties between Oman and Saudi Arabia have taken great strides towards integration and strengthening the partnership between the two countries.

“What happened during the past two years, specifically after the visit of Sultan Haitham bin Tariq to the Kingdom, exceeded what had happened during the past two decades,” said Murshidi in an interview with Asharq Al-Awsat from his office in Muscat.

Murshidi confirmed that large projects linking Oman and Saudi Arabia will be announced in the future.

Moreover, the Omani official revealed that the Saudi Public Investment Fund, by orders of Saudi Crown Prince Mohammed bin Salman, has allocated $5 billion to establish a company in the Sultanate.

“We started looking for investment opportunities that the company could enter into,” said Murshidi, disclosing that an attaché was appointed to the Investment Authority at the Omani Embassy in Riyadh.

A few days ago, during a budget presentation, Murshidi revealed that the Omani Investment Authority aims during 2023 to spend OMR 1.9 billion ($4.95 billion) in investment projects.

“Proceeding with Oman Vision 2040, one of the most important axes of which is economic diversification, is not done by completely dispensing with the oil and gas sector, but rather by investing in other sectors,” said Murshidi.

Oman Vision 2040 has identified five main sectors to invest in, namely: tourism, logistics, industry, mining, and food.

Nevertheless, Oman is aware of opportunities found in other sectors as well.

“Whenever there are new changes in global trends, we will direct the investment compass to them, including the possible sectors, which are the information technology, digital economy, and financial sectors,” explained Murshidi.

When asked about how Oman’s investments will be financed, Murshidi said: “Investment spending in 2023 will be carried out through financing institutions, partnerships with the local and foreign private sectors, and the country’s investment agency and its subsidiaries.”

Murshidi noted that Oman seeks to reduce the total debt of its investment authority subsidiaries during the next five years.

As for evaluating Saudi investment in the Sultanate, especially after the establishment of the Saudi-Omani Coordination Council, Murshidi said: “Creating the Council resulted in a number of projects, and we had the honor to be the point of contact with the relevant authorities in Saudi Arabia.”

The Omanis have been working with Saudi Arabia’s Public Investment Fund and the Saudi Arabian General Investment Authority (SAGIA). They have also worked with several other companies such as SABIC and Naqua.

Oman's state-owned Asyad Group and Saudi Arabia’s shipping giant, Bahri, have signed a deal for maritime transportation.

Regarding the Saudi Crown Prince’s orders to establish a $5 billion company in Oman, Murshidi said: “We are currently conducting the procedures for registering the company, renting offices, and hiring employees.”

“We have also begun to search for investment opportunities that the company can access,” added Murshidi.

“We, in cooperation with the Foreign Ministry, assigned one of our employees to work as an investment attaché at the Omani embassy in Riyadh, to be a link with the parties in the Sultanate and the Kingdom.”

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Israel-Iran Conflict Disrupts Air Travel in the Region

Flight information display screen shows updates about cancelled flights, due to schedule disruptions stemming from the Iran-Israel conflict, at the Beirut-Rafik Hariri International Airport, Lebanon June 16, 2025. (Reuters)
Flight information display screen shows updates about cancelled flights, due to schedule disruptions stemming from the Iran-Israel conflict, at the Beirut-Rafik Hariri International Airport, Lebanon June 16, 2025. (Reuters)
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Israel-Iran Conflict Disrupts Air Travel in the Region

Flight information display screen shows updates about cancelled flights, due to schedule disruptions stemming from the Iran-Israel conflict, at the Beirut-Rafik Hariri International Airport, Lebanon June 16, 2025. (Reuters)
Flight information display screen shows updates about cancelled flights, due to schedule disruptions stemming from the Iran-Israel conflict, at the Beirut-Rafik Hariri International Airport, Lebanon June 16, 2025. (Reuters)

The escalating military conflict between Israel and Iran is creating mounting challenges for Middle Eastern airlines, including airspace closures and rerouted flight paths, all of which are driving up operational costs.

While Gulf carriers are relying on alternative routes - albeit more expensive ones - private airlines in neighboring countries face the risk of exiting the market altogether if the crisis persists.

Countries geographically close to the conflict, such as Iraq, Lebanon, and Jordan, are increasingly concerned about the conflict’s deepening impact on the civil aviation sector, which represents one of the most sensitive branches of their economies. The threat is no longer confined to security concerns alone, but is now hitting the economic core of these nations.

Dr. Hussein Al-Zahrani, an aviation investor, told Asharq Al-Awsat that countries geographically tied to the Iran-Israel conflict are already facing direct complications in the aviation sector. These include airport closures and rerouted flights, such as the diversion of Jordanian planes to Egypt’s Cairo and Sharm El Sheikh, or grounding aircraft entirely.

Al-Zahrani noted that national carriers in these countries, particularly state-owned airlines, are more likely to receive government support to help them weather the storm. However, the limited number of private airlines operating in these regions may not survive a prolonged crisis.

Iraq has approximately five carriers, Lebanon one, Syria two (one of which is government-owned), and Jordan three; all of which could suffer significantly if the conflict drags on.

In contrast, Gulf airlines have contingency plans in place, Al-Zahrani said, although they are not immune to the repercussions.

Increased flight distances and restricted airspace will present logistical and financial burdens, though Gulf carriers are more resilient and often absorb the extra costs themselves. In many cases, rerouting results in only minor extensions - around 20 minutes - which allows airlines to maintain stable pricing.

He cited exceptions, such as some northern-bound Kuwaiti flights to Europe that typically rely on Iraqi airspace. These will now need to reroute via Saudi airspace, then over the Mediterranean to reach Europe, significantly increasing flight durations and operating expenses.

Al-Zahrani also pointed out that many transcontinental flights between East and West, which pass over Saudi and Iraqi airspace, will be disrupted if closures in conflict zones persist. This may force airlines to reschedule, reroute, or even suspend certain long-haul routes if they become economically unfeasible.

Aviation-sector companies are considered foundational contributors to national budgets, particularly in countries where the industry plays a major economic role. According to Al-Zahrani, these entities are typically the first to suffer in the event of military conflicts, especially as oil prices rise and long-haul operations become increasingly expensive.

Observers warn that if Iran were to close the Strait of Hormuz - a vital maritime corridor connecting the Arabian Gulf to the Gulf of Oman and the Arabian Sea - it would further heighten concerns for both maritime and air transportation companies, given the anticipated spike in insurance costs and risk premiums should the crisis continue.

Economic analyst Marwan Al-Sharif told Asharq Al-Awsat that airlines may be able to navigate the crisis if it remains short-lived, especially those operating in proximity to the warring parties. However, if the conflict drags on, the resulting losses could grow more severe, weakening the financial viability of many carriers amid rising fuel costs, airspace restrictions, and surging insurance rates.