Oman’s Ministry of Energy and Minerals expects improved shipping conditions in the Red Sea following the recent ceasefire agreement between Israel and Hamas. This positive outlook suggests a potential return to normalcy for maritime traffic in the region, reports S&P Global.
Improving Conditions
Oman’s energy minister, Salim al-Hadhrami, expressed optimism about improving conditions and hoped for a peaceful resolution to geopolitical tensions. Following the Israel-Hamas ceasefire, Houthi rebels pledged to halt attacks on Red Sea shipping, except for Israeli-linked vessels.
While Oman’s LNG shipments haven’t been affected due to their primarily Asian destination, the ministry is closely monitoring oil product shipments. Hadhrami acknowledged that avoiding longer, costlier routes is natural and impact product costs, but currently, the ministry isn’t overly concerned about insurance and other related costs.
Green Hydrogen Projects
Oman intends to launch its third green hydrogen project auction by March and is also planning to add another LNG train. The country’s goal is to produce 1.4 million metric tons of green hydrogen annually by 2030, and KBR has already secured a design contract for a fourth train at the Qalhat LNG complex.
While acknowledging decreased industry enthusiasm for green hydrogen compared to last year, Oman is proceeding with the auction due to some remaining interest. The upcoming auction’s capacity will be similar to, or slightly smaller than, previous rounds, likely involving one or two blocks. The final size and metrics will be determined based on industry feedback. Although initial plans targeted green hydrogen production by 2028, Hadhrami indicated that this timeline may be difficult to achieve due to the time required for financing, consortium formation, agreements, and evaluations. However, he noted that most projects are currently progressing according to their post-signature plans, supporting the 2030 production target.
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Source: S&P Global
