Oman Moves to Capitalize on Strategic Location with Major Oil Storage Expansion

As geopolitical tensions underscore the vulnerability of key maritime chokepoints, Oman is advancing a significant upgrade to its oil storage infrastructure. The focus is on the port of Duqm, situated safely outside the Strait of Hormuz, with plans to transform it into a pivotal hub for storage and redirection of regional energy exports.

A Two-Pronged Approach to Boost Capacity

Ashraf Al Mamari, CEO of state-owned energy company OQ SAOC, outlined a dual-track strategy designed for both speed and scale.

  • Floating Storage Solution: The company is evaluating the purchase of two Very Large Crude Carriers for conversion into floating storage units at Duqm. This offers a rapid, flexible means to increase operational capacity.
  • Onshore Tank Expansion: In parallel, a project is underway to double onshore crude storage capacity from the current 5 million barrels to 10 million barrels within the next three years.

Leveraging Geography for Trade Diversification

This expansion is a direct response to a clear market need. The Strait of Hormuz, a vital artery for global oil shipments, presents a persistent risk due to regional instability. Duqm's location on the Arabian Sea, south of the strait, provides a natural alternative.

Al Mamari emphasized that the enhanced facilities are intended to serve energy producers looking for secure export routes that bypass the volatile waterway. Crude can be stored, blended, and loaded onto outbound vessels at Duqm, offering a viable logistical workaround.

Positioning for a Shifting Energy Landscape

The successful implementation of this plan would elevate Duqm from a regional port to an international oil storage and trading center. This promises to generate substantial revenue for Oman and attract increased activity from global energy firms.

Beyond national interests, the development contributes to greater resilience in global energy supply chains by providing a major storage option outside the traditional Persian Gulf system. Oman is strategically positioning itself to become a dynamic nexus for redirected energy flows.