Oil profit fall at Oman’s OQ suggests bigger decline in Q2

• Net profits down by 9%
• Impact of global uncertainty
• Oil price will affect Q2

Oman’s state-owned energy group OQ, which produces about a quarter of the country’s oil, reported a decline in first-quarter profit on the back of a fall in the price of crude.

Net profit in the three months to March 31 fell 9 percent to $194 million over the same period last year, the company said in a statement.

“During this period, growing concern about the global economy, caused by emerging trade wars and an unscheduled increase in future supply from Opec+, drove the average of Oman crude price down,” the company said in its financial report.

The average price of Omani blend fell to $75.3 per barrel in the first quarter, from a full-year average of $80.4 per barrel in 2024, it said. 

The decline in profit suggests another, perhaps even more pronounced fall in this second quarter, since oil prices have tumbled even further in the April wake of President Donald Trump’s near tripling in effective import tariffs to the world’s largest economy.

From almost $75 per barrel on April 2, the day of President Trump’s unexpected tariff announcement, the price of benchmark Brent crude has plunged nearly 20 percent to about $61 per barrel now, on lower forecast growth in the global economy and energy demand.

OQ said it would remain “extremely vigilant about the ongoing market volatility” in the second quarter and “continue to optimise the business for all eventualities”.

OQ operates across the entire energy chain, including oil and gas exploration and production, refining, petrochemicals, trading, alternative energy, power generation, infrastructure and transportation for energy. 

Omani production of crude oil and associated condensates fell by more than 5 percent last year to an average 993,000 barrels per day. 

As a result, economic growth last year was muted, at under 2 percent. The hydrocarbon sector accounts for more than a quarter of Oman’s GDP and almost two thirds of its exports. 

Condensate is a generic term used to describe a variety of very low-density, very low-viscosity liquid hydrocarbons that typically occur along with natural gas. Condensates can also exist separately from crude oil or combined with it.

• Omani fund to invest $300m in Algeria’s economy
• Oman to build liquefied hydrogen corridor with Europe
• Oman launches LNG project for clean marine fuel

OQ Exploration & Production, the upstream unit of the OQ energy group, produced a daily average of 228,000 barrels per day of oil equivalent, the combination of crude oil and condensates.

OQ energy group said its Q1 profit was also weighed down by repayments on a near $1 billion loan it took out in September.

Oman posted a fiscal surplus of $1.4 billion last year as it sold oil at an average price of $82 per barrel, a third higher than the forecast of $60 per barrel on which the 2024 budget was based.

OQ, formerly known as Oman Oil Company, is owned by state-controlled Oman Investment Authority sovereign wealth fund.