Saudi Arabia, the UAE, Bahrain, and Egypt severed diplomatic relations and imposed a land, sea, and air blockade on Qatar more than a year ago, in June 2017. Those countries alleged that Qatar was developing an alliance with Iran and backing radical Islamist groups like the Muslim Brotherhood, Hamas, and the Islamic State. As the crisis drags on more than a year later, most of the Gulf Cooperation Council (GCC) countries have sided with the Saudis. The exceptions are Kuwait, which serves as the principal mediator of the conflict, and the Sultanate of Oman.

Muscat has remained politically neutral throughout the crisis by refusing either to join the blockade or to cut off diplomatic relations with Doha; however, economically, it has strengthened cooperation with Qatar. While Oman’s political neutrality stems from its historical and geographical context, the country’s economic rapprochement to Qatar reflects its vulnerable economic situation.

Since the start of the blockade, Oman has been politically “on the fence” towards both Qatar and the GCC, refusing to express support for one side over the other. Mahjoob Zweiri, an associate professor at Qatar University stated, “Oman is trying to play this role of being in the middle, helping to maintain the status quo. It doesn’t welcome any sudden change because it has hoped to maintain the geopolitics of the region as it is, without any turbulence.”

The reason for Oman’s seeming indecisiveness is twofold. The first is historical precedent. The Omani Sultan Qaboos bin Said Al Said has maintained an independent approach to foreign policy and struck a balance between conflicting interests since he came to power in a coup against his father in 1970.

In particular, he has protected his nation’s relationship with Iran since the Shah backed Oman militarily during the Dhofar Rebellion–a movement against the Omani regime in the sixties and seventies. The Sultanate remained neutral during the Iran-Iraq War of the 1980s, when most Gulf countries sided with Iraq, and it served as a mediator in the conflict. Oman additionally helped negotiate the resumption of diplomatic relations between Saudi Arabia and Iran following the war, and mediated between Egypt and Iran following the Iranian Revolution.

More recently, Oman hosted secret negotiations between the West and Iran as part of the Iran nuclear deal, signed in 2015. The two countries have also orchestrated joint military action in the geopolitically significant Strait of Hormuz since 2014. The Sultanate’s tradition of neutrality, and its relations with Iran in a region that is otherwise hostile towards the Shia nation, have obliged Oman to maintain impartiality in regional conflicts.

“[W]e are doing our best to keep this waterway open for the benefit of international trade and flow of energy to the rest of the world.”

Elsewhere in the region, Oman has equally exercised independence in its foreign policy. Oman and Qatar, for example, broke from the GCC consensus on Saddam’s Iraq by maintaining low-level diplomatic ties with the country and calling for the sanctions to be lifted. Oman was also one of the few countries to continue to have diplomatic relations with the Assad regime during the ongoing civil war, and it refused to participate in the Saudi-led coalition against the Houthis in Yemen. In 2012, the Omani foreign minister underscored his country’s neutrality, stating: “[W]e are doing our best to keep this waterway open for the benefit of international trade and flow of energy to the rest of the world.”

Oman’s neutrality also reflects its geography: the nation sits on the edge of the Gulf and in close proximity to Iran. The Sultanate shares borders with the UAE and Saudi Arabia, but is also located on the Strait of Hormuz, one of the world’s busiest oil transits through which some 30 percent of all seaborne oil exports passes each day.

On the opposite side of the Strait sits Iran, just 55 kilometers away at its narrowest point, which has the military capability to close the Strait if it chooses. Tehran threatened to do so when the U.S. withdrew from the Iranian nuclear deal in May of this year. Thus, Oman’s geographic location between Saudi Arabia, the UAE, and Iran also encourages its neutral foreign policy position.

In contrast, from an economic perspective, Oman has tacitly supported Qatar by breaking Doha’s economic isolation and ramping up economic cooperation with the Sultanate. From June to September 2017, Muscat and Doha increased trade volume by 2,000 percent, totaling $702 million in trade transactions.

Meanwhile, from January to September 2017, Oman increased its non-oil exports to Qatar by 144 percent. Qatar rented Omani airplanes to transport passengers after Saudi Arabia refused to allow Qatari planes to enter its airspace. Finally, Muscat and Doha also signed an agreement in January 2018 aimed at deepening trade and financial ties.

Oman is economically reliant on its dealings with both Qatar and Iran. Revenues from oil provide 80 percent of the regime’s income, and a conflict with Iran could spell disaster for the Sultanate’s oil exports. The nation, like so many in the region, also suffers from high levels of youth unemployment and a growing budget deficit.

Both Saudi Arabia and the UAE are critical of Oman’s friendly relations with Qatar and Iran and have accused it of threatening GCC security. The two are increasing  political pressure on Oman to toe the GCC line toward Qatar. Saudi’s King Salman refused to visit Muscat on his 2016 tour of the region. Riyadh and Abu Dhabi are also asserting economic pressure on Muscat by slowing business deals and adding to bureaucratic challenges placed on trade with Oman.

The UAE has, for example, delayed construction of a railway linking Duqm, a port town in central-eastern Oman, with other countries in the region. Additionally, Abu Dhabi is investing more heavily in Oman’s Musandam peninsula and Batinah coast in the north of the country near the UAE border. Oman has interpreted the move as an effort to make Oman more economically dependent on its neighbors.

For now, Muscat is endeavoring to continue its stance of political neutrality in the Qatar crisis, while reaping as many economic benefits as possible. As the conflict persists, however, and as its neighbors intensify pressure on the Sultanate to conform to their wishes, Oman may find itself being strong-armed toward  one side or the other.