Oman says latest attacks not affecting investment projects

• Oman evacuates ships in drone attacks
• ‘No disruptions’ to existing operations
• Diversification remains a priority

Oman evacuated ships in two terminals on Wednesday following Iranian drone attacks, but it has assured investors there is no disruption to existing operations in its economic and free zones and that its expansion plans this year are still on track.

The incidents highlight how the Iran war is weighing on Oman’s economic development drive, though authorities say investors should “hold their nerve”.

The official Oman News Agency (ONA) said drones struck fuel tanks at the Salalah port forcing it to halt its container operations.

Ships were also moved from an oil export terminal at Minal Al Fahal in Muscat as a precaution, Oman Television reported. Other ports in Sohar, Duqm, Shinas and Sultan Qaboos are operating normally.

In a separate incident on Thursday ONA reported that a Thai-flagged bulk carrier “was attacked approximately 13 nautical miles off the coast of north of Oman”. The attack started a fire in the engine room with no casualties, it reported.

The news agency also reported on Friday that two drones struck an industrial area of Al-Awahi in Sohar, killing two foreign workers and injuring several others. 

These incidents are part of the ongoing US and Israeli attacks on Iran that have resulted in retaliatory attacks on Gulf state targets.

But the head of Oman’s economic and free zones has told investors to hold their nerve and urged them not to be swayed by the recent news.

“There are no operational disruptions on the projects in our special economic zones, industrial estates and free trade zones. All operations are proceeding normally, backed by stable supply chains and logistics services,” Qais Mohammed Al Yousef, chairman of Public Authority for Special Economic Zones and Free Zones (Opaz), told AGBI in an exclusive interview.

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He also said the land, maritime and air logistics “are operating [as] normal and smoothly” through the ports, airports and roads linked to the economic and free zones. 

Total committed investments under state-run Opaz is $50 billion, from which $3.6 billion was invested in 2025, he added. Looking ahead, Al Yousef said all the investments in 2026 are proceeding as planned. 

The projects being implemented this year include a food production plant at Sohar, green ammonia and hydrogen projects in Duqm and pharmaceuticals and chemical processing units in Salalah. 

“We are telling investors that we are here for them to listen to their concerns and not to respond to the news,” Al Yousef said. 

Two drones hit Duqm in the first three days of the war, which started on February 28, injuring an Asian worker. The debris of the second landed near the fuel depot but caused no damage.

Sohar, Salalah, Duqm and Shinas ports are located away from the Strait of Hormuz, which Iran has effectively closed for oil exports. The strategic narrow water passage, shared both by Oman and Iran, is used to transport a fifth of global seaborne oil. 

Analysts say the regional war should not slow down Oman’s progress on hydrogen projects but push ahead plans for economic diversification.

“There have been wars in the region before and this is another one that will not last,” said Nasser Al Brashdi, executive director at Muscat-based Majan Investment.

“Oman is already on its way to diversify its economy, and green hydrogen is on top and the war should not slow down its ambitions.”

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Oman’s most ambitious venture in the economic zone is the HyDuqm green hydrogen project, which is a consortium of France’s Engie and South Korea’s Posco. It hopes to attract up to $8 billion in investment and expects a capacity of 5 gigawatts of wind and solar power generation when completed. 

The sultanate aims to produce at least 1 million tonnes of renewable hydrogen a year by 2030, up to 3.75 million tonnes by 2040, and up to 8.5 million tonnes by 2050. That would be greater than total hydrogen demand in Europe today.

The International Energy Agency says Oman is on track to become the sixth-largest exporter of hydrogen globally, and the largest in the Middle East, by 2030.