Oman Economy Performance During Covid-19 with focus on ports performance-Mahmood Sakhi Albalushi-Nov 2020

Oman’s Economy Performance During Covid-19
(with focus on the seaports’ performance)
Mahmood Sakhi Albalushi
Member of Oman Economic Association
November 2020
1. Introduction:
The Covid-19 has enormously disrupted nearly most business sectors among other sectors. Logistics is the
arteries of economies and trade. The coronavirus crisis has significantly impacted the logistics sector and the
supply chains. On the other hand, the logistics sector has been a vital success support factor to sustain the
economies during the current Coronavirus crisis.
The primary entry/exit points of countries are managed through land borders, airports, and seaports. The
domestic operations are handled by the logistics service providers. With the outbreak of Coronavirus, the world
started to slow down as governments began to lock down and limit all accessibilities to and from their countries.
In Oman, the government and the private sector, as in many other countries, have started very early to mitigate
the risks and find solutions and alternatives to combat the Covid-19 negative impacts. Traffics at airports and
land borders were severely affected compared to the seaports. Seaports played vital roles in keeping the
countries connected with the outside world and keeping the imports and exports continue to flow. The medical
and food products have been the major contributors to the transported volumes.
This paper analyzes Oman’s economy in terms of GDP, trade, and workforce in general. The focus would be on
the primary seaports performance; Sohar and Salalah. The economic and social challenges are great during
these unprecedented difficult times caused by the Covid-19 crisis which is not only a health crisis but also an
economic crisis.
2. Asyad Group and the Customs
The Omani ports, with the leadership of the Asyad Group that oversees the logistics sector and ports, played a
vital role from day one as the Coronavirus outbroke. Oman Customs played a pivotal role in supporting and
facilitating trade. Asyad and the ports’ management teams have been proactively monitoring the Covid-19 crisis
and its impacts on ports’ operations and trade links. The Omani ports have been able to manage the operations
very well since the outbreak of the covid-19 crisis.
Asyad Group has proactively coordinated with ports’ administrations in assessing the effects of the Covid-19
pandemic on ports’ preparations and facilitating the trade links so that the flow of cargos continues as normal
as possible, especially for essential products such as food and medical supplies. Omani ports have managed the
operations very well during the first months of the crisis and continue to do so. All ports have been able to
operate to their full potential while taking strict measures to mitigate the risks of operations and the effects of
Covid-19 on the health of workers and those dealing with the ports.
The procedures carried out by the Directorate General of Customs have contributed significant positive impacts
on the ease and flow of export and import movements. It has facilitated the process of documents and
procedures for customs clearance requirements through the Bayan Electronic System and online transactions.
It has also introduced prior and remote customs clearance with excellent flexibility to assist the flow of trade.
Oman’s Economy Performance During Covid-19 with focus on Ports
MAHMOOD SAKIH ALBAUSHI
All seaports have been running full capacity while taking strict safety measurements to mitigate the operations'
risks during these tough health crisis times. The ports have been able to maintain an uninterrupted flow of
goods and commodities. Moreover, and in spite of the difficult times, the ports have been able to develop new
direct shipping line routes. According to Asyad, the Omani ports, despite these challenging times, were
successful in developing 200 direct routes connecting 86 ports in 40 countries. Notwithstanding some reduction
in the volumes, which is very normal during such crisis times, the overall performance is considered
commendable. However, the Asyad and ports companies need to evaluate and analyze the reductions if they
are temporary and related to the crisis or are long term and structural.
Figure 1: Alphaliner: Top Operators of world containers in term of TEUs, 2020
Asyad Group Oman has entered the containership business through its subsidiary Oman Shipping Company
under the brand “Oman Container Line (OCL).” With chartered 17,300 TEUs, it has achieved the rank 50 in the
top 100 container companies published by Alphaliner in September 2020. With this massive capacity, OCL
provides excellent capacity to businesses and traders, connecting Oman with the world.
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Oman’s Economy Performance During Covid-19 with focus on Ports
MAHMOOD SAKIH ALBAUSHI
3. Impact of Covid-19 on the GDP and Workforce Mix
The impact of Coronavirus has been significant on all economic aspects. Oman is having its share of the impact.
The workforce market, which comprises of expatriates as the majority, has started to see the impact of economic
slowdown due to the lockdowns.
Oman Private Sector Workforce and GDP (Rial Omani)
35,000,000
1,900,000
1,700,000
30,000,000
1,500,000
1,300,000
25,000,000
1,100,000
20,000,000
900,000
700,000
15,000,000
500,000
10,000,000
300,000
5,000,000
100,000
(100,000)
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
Omani
Expatriate
-
GDP
Figure 2: Oman Private Sector’s Workforce compared with GDP trends
Figure 2 analyzes the workforce (Omani-Expatriates) trend compared to the GDP trend over the last 15 years.
The trends show a strong correlation between the workforce and GDP. It shows the growth of the economy has
propelled the growth of the expatriate workforce while the Omani workforce remained almost constant (very
trivial growth compared to the annual numbers entering the job market) over the last 15 years. The yearly
average increase of Omanis in the private sector has been 11,494, compared to 77,704 for expatriates. With the
high numbers of job seekers augmented by new annual job seekers entering the labor market, the officials
seriously need to evaluate the causes and find realistic solutions. The natural growth trend should have been
the same for Omanis and expatriates. Another crucial point to study is the drop in the expatriate workforce over
the last four years, since 2017.
GDP sub-sectors and Private Sector Workforce mix
16000
2,000,000
14000
1,800,000
1,600,000
12000
1,400,000
10000
1,200,000
8000
1,000,000
6000
800,000
600,000
4000
400,000
2000
200,000
0
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020e
Omani-Private Sector
Expatriate-Private Sector
Crude Petroleum
Agriculture & Fishing
Industry Activities
Services Activities
Natural Gas
Figure 3: Oman Private Sector’s Workforce compared with GDP sub-sectors trends
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Oman’s Economy Performance During Covid-19 with focus on Ports
MAHMOOD SAKIH ALBAUSHI
Figure 3 above analyzes the GDP sub-sectors trends compared with the workforce mix. The numbers show that
GDP grew mainly because of the crude petroleum (which was caused by high oil prices, not the production),
services activities, and industrial activities. Despite the significant drop in oil prices since the end of 2014, the
overall GDP continued to grow, supported by the Services Activities and Industrial Activities. With these two
sectors as prime drivers for GDP increase, the workforce had seen similar growth but in the expatriates' category,
while Omanis experienced a slight increase. It means the economy was able to create jobs. The government
needs to analyze the actual reasons why jobs were not suitable for Omanis or why Omanis were not suitable for
the jobs, or was it because of the laws and regulations that are governing the labor market.
Crude Petroleum
Natural Gas
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
-
2,000
1,500
1,000
500
Services Activities
Industry Activities
16,000
7,000
14,000
6,000
12,000
5,000
10,000
8,000
6,000
3,000
2,000
2,000
1,000
Agriculture & Fishing
900
800
700
600
500
400
300
200
100
-
4,000
4,000
-
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020e
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020e
-
-
Figure 4: Oman’s GDP Main Sectors’ Trends and Covid’s Effect
Charts in figure 4 show the trends of the main Oman’s GDP sectors over the past years. The Crude Oil has been
highly volatile. It had reached its peak in 2010 to 2014 when it started to drop drastically. It has completely
disrupted all development plans. The Natural Gas has come at the right time to compensate for the oil drop. It
has had consistent growth, though it has started to drop since 2018. The Services and Industrial Activities charts
show a correlation with the oil and gas contribution to the overall GDP. On the other side, the Agricultural &
Fisheries Activities show continuous growth despite the drop in other sectors. It indicates that some activities
do not necessarily get linked with the changes in the major sectors in the GDP. The agriculture & Fisheries sector
needs to have more attention from the development planners so it can add more value to the overall economic
growth.
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Oman’s Economy Performance During Covid-19 with focus on Ports
MAHMOOD SAKIH ALBAUSHI
Oman Population mix - Omani/Expats Percentage Change
3.00%
2.00%
1.00%
0.00%
-1.00%
-2.00%
-3.00%
-4.00%
Omani
Expatriates
Figure 5: Oman Population mix: Oman and Expatriates
The chart in figure 5 shows the changes in the Oman’s population mix. The changes usually happen to the
expatriates. It is clear from the chart that the regular changes typically occur for the expatriate population in
the summer months and end/beginning of the years with minor change during March. All mostly are the results
of holidays and workforce transfers from one organization to another as they usually need to travel to change
the company (the general trend in the last years is a decline in expatriates population). As shown in the chart,
the 2020 year has been entirely different. The impact of Covid-19 is palpable. The reduction of the expatriates
continues since February 2020 with over a 1.6% compound decrease-rate. Since it is mainly due to Covid-19 and
lockdowns, we are yet to see if the curve will go upward if the new Normal starts to allow the businesses to
operate, and the economy begins the growth cycle.
Expatriates Workforce (2020)
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
Jan
Feb
Mar
Expatriates-Private
Apr
May
Jun
Expatriates-Family
Jul
Aug
Expatriates-Public
Figure 6: Oman Private Sector’s Workforce Types Trends in 2020
Page 5 of 22
Sep
Oct
Oman’s Economy Performance During Covid-19 with focus on Ports
MAHMOOD SAKIH ALBAUSHI
The chart in figure 6 shows different types of expatriates based on job category and sector. All these types have
been affected and have started to decrease since February 2020 considerably. The main cause has been the
Coronavirus as it disrupted almost all business sectors and led some businesses to partially and fully close during
these months. This has forced enterprises to control costs and reduce the workforce needed for operations.
Oman Private & Public Sector Workforce
Jan-Oct 2020 Change
(50,000)
(100,000)
(150,000)
(200,000)
Figure 7: Oman Private & Public Sectors’ Workforce Mix Trends and Change
From January to October 2020, the number of Omanis in the Private Sector reduced by 6,017, about 2.3%. While
the expatriates in the Public Sector decreased by over 20%; 10,763 and in Family Sector decreased by over 11%;
32,922. The effect of Coronavirus has been significant also on expatriates in the private sector. The decrease in
the private sector has been around 14.7%; 195,865.
Private Sector Workforce Mix
Private Sector Workforce Mix
2,000,000
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
-
2,000,000
1,500,000
1,000,000
500,000
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020e
-
Omani-Private Sector
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020e
2,500,000
Omani-Private Sector
Expatriate-Private Sector
Expatriate-Private Sector
Figure 8: Oman Private Sector’s Workforce Mix Trends
The workforce in the private sector has had exceptional growth over the past years (see charts in figure 8).
However, growth has been more remarkable, primarily in the Expatriates workforce. Even with these growth
trends, the overall numbers in the private sector has been decreasing since 2017. The labor force is critical for
developing the overall economy. The decreasing number of expatriates needs to be analyzed and studied in
terms of its correlation with economic development growth.
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Oman’s Economy Performance During Covid-19 with focus on Ports
MAHMOOD SAKIH ALBAUSHI
4. General Performance of Exports and Imports
Balance of Trade is one of the primary indicators that help gauge the quality and strength of countries’ economic
health. When exports value is more than imports value, it is viewed that the country’s economy enjoys a positive
balance of trade. While higher imports’ value compared to the exports’ value is considered as a trade deficit.
Oman enjoys a positive balance of trade primarily due to the sale of crude oil and gas. Therefore, we need to
analyze the balance trade in terms of other than the contribution of oil and gas in the trade. This will give us a
better understanding of the economy and productivity. Below charts in figure 9 show the trends in Exports (nonoil), Re-Exports, and Imports. With the drop in the oil prices since 2014, the exports, imports, and re-exports all
have been negatively affected and expected to further drop, as shown in the charts in figure 9. All types of trade
have decreased since 2017. None-Oil exports, imports, and ex-exports by 11.5%, 10.9%, and 46% respectively.
Oman Non-Oil Exports, Imports & Re-Exports
16,000
14,000
30%
26%
23%
12,000
25%
23%
21%
20%
19%
19%
10,000
16%
20%
16%
8,000
15%
6,000
10%
4,000
5%
2,000
-
0%
2012
2013
2014
Re-Export % of Imports
2015
2016
Non-Oil Export
2017
2018
Import
2019
Re-Export
2020e
Net Import
Exports(Non-Oil), Imports, Re-Exports
(R.O. Million) 2020
Exports(Non-Oil), Imports, Re-Exports 2020
800
700
600
500
400
300
200
100
0
800
24%
26%
26%
19%
600
12%
400
15%
200
0
Non-Oil
Export
Jan
Import
Feb
Mar
Re-Export
Apr
May
Net Import
Jun
Jan
Feb
Mar
May
Jun
Non-Oil Export
Import
Re-Export
Net Import
Figure 9: Oman’s Non-Oil Exports, Imports, and Re-Exports
Page 7 of 22
Apr
Re-Export % of Imports
30%
25%
20%
15%
10%
5%
0%
Oman’s Economy Performance During Covid-19 with focus on Ports
MAHMOOD SAKIH ALBAUSHI
Below charts in figure 10 show trends of imports by point of entry during the first half of 2020 in terms of value
and tonnage. The trends show the effect of Coronavirus and Ramadhan season when traders piled the inventory
during April. The volumes started to regain from May 2020.
Imports (Value R.O. million) by Point of Entry 2020
Imports (000 Tons) by Point of Entry 2020
800
3,500
700
3,000
600
2,500
500
2,000
400
1,500
300
200
1,000
100
500
-
-
Jan
Feb
Mar
Apr
May
Jun
Air (RO million)
107
91
72
62
50
92
Air (000 Tons)
Land (RO million)
219
242
234
146
130
174
Sea (RO million)
341
308
385
283
325
328
Jan
Feb
Mar
Apr
May
5
5
5
2
3
Jun
3
Land (000 Tons)
660
699
548
535
393
490
Sea (000 Tons)
1,326
1,090
2,321
668
2,107
1,800
Figure 10: Oman’s Imports by point of entry in terms of value and tonnage in 1 st half of 2020
The sea trade has shown exceptional performance to compensate for the air and land trade volumes. The air
cargo movement has been the most hit by Covid-19 as most countries imposed complete lockdown and
restriction on air travel, except for emergency and pharmaceutical products. The air cargo dropped by over
38.4% in terms of freight ton and around 41.2% in value Omani Rial. The land border had the same restriction
on the transport of the cargo across borders. It dropped by 25.7% in terms so freight ton and by around 20.3%
in terms of value in Omani Rial. The trade through seaports had exceptional growth in terms of volumes but
dropped in terms of value in Omani Rial. It had increased by over 35.7% in volume and decrease by around 3.7%
in value.
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Oman’s Economy Performance During Covid-19 with focus on Ports
MAHMOOD SAKIH ALBAUSHI
5. Sohar Port Performance
Sohar Port is considered the main industrial and commercial port in Oman. About 60% of all cargo of the country
moves through it. The Sohar industrial port's overall area is managed by Sohar Industrial Port Company, a 50:50
joint venture company between the Government of Oman and the Port of Rotterdam through the landlord
concept. The Sohar Port is considered one of the major deep-sea ports in the region. It is strategically located
on the Gulf of Oman and easily reachable to major economies in the region such as GCC, the Indian subcontinent,
and eastern Africa. It is also on the main maritime routes between the East and the West, as well as Africa.
The port was developed to be Oman’s main industrial port in addition to handle all commercial cargo and to
replace the Sultan Qaboos Port in Muscat.
The port cargos’ terminals are managed and operated by three companies. The container terminal is managed
and operated by Oman International Container Terminal (managed by Hutchison Ports). The dry bulk and breakbulk terminals are managed by C. Steinweg Oman Company. The liquid terminal is managed and operated by
Oiltanking Terminal & Company.
Figure 11: The overall view of Sohar Industrial Port
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Oman’s Economy Performance During Covid-19 with focus on Ports
MAHMOOD SAKIH ALBAUSHI
Sohar Port is the main industrial and commercial port for Oman. It handles over 60% of Oman’s imports, over
40% of exports, and over 80% of re-exports volumes.
Oman's Imports, Exports, & Re-Exports (2020)
Sohar Port
Others
80%
60%
40%
Imports
Exports
Re-Exports
Figure 12: Overall imports and exports through Sohar Port in 2020
The Sohar Port has announced that the results of Q2 of 2020 have experienced an increase of 112% in the volume
of goods transported via the port, a 16% increase in the Ship-to-Ship (STS) operations, and an increase of 4% in
the anchorage calls.
Sohar Port - Vessels Calls
800
50.0%
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
700
600
500
400
300
200
100
0
2012
2013
2014
2015
2016
Vessels
2017
2018
2019
2020e
Change %
Figure 13: Sohar Port – Vessel Calls
Since the shift of Oman’s commercial port from Sultan Qaboos Port to Sohar Port in 2014, Sohar Port has grown
faster. The number of vessels handled by Sohar Port continues to grow since 2015. Though the container
volumes are expected to decrease, the overall volumes handled by other terminals at Sohar Port are expected
to grow, increasing the number of calls by vessels.
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Oman’s Economy Performance During Covid-19 with focus on Ports
MAHMOOD SAKIH ALBAUSHI
5.1 Container Terminal at Sohar Port
The container terminal company, Oman International Container Terminal Company, was established in 2005. It
is a subsidy of Hutchison Ports. It is dedicated to handling container cargo. The Twenty-foot Equivalent
Containers (TEUs) handled by the Sohar Port are shown in the below charts.
The overall TEUs handled by the container terminal has been decreasing since 2018. Sohar Port experienced
exceptional growth starting the 2nd half of 2014 as a result of the closure of commercial operations at Sultan
Qaboos Port in Muscat on 31st August 2014. The growth continued till 2017. Since then, the volumes have
started to decline. The 3rd Quarter of 2020 experienced a small increase; however, the total number of TEUs in
2020 is expected to be lower by 1% compared to the year 2019 total.
Sohar Port TEUs
Sohar Port TEUs Volumes & Change
300,000
250,000
200,000
150,000
100,000
50,000
2012 2013 2014 2015 2016 2017 2018 2019 2020
Q1
Q2
Q3
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
-
60%
50%
40%
30%
20%
10%
0%
2012 2013 2014 2015 2016 2017 2018 2019
Total
Q4
70%
2020
e
-10%
198,8 209,8 330,6 536,3 618,8 838,7 825,6 795,4 788,5
Change %
5.5% 57.6% 62.2% 15.4% 35.5% -1.6% -3.7% -0.9%
Figure 14: Sohar Port annual TEUs handled, 2020 Total is estimated based on the first three quarters’ figures
Figure 14 shows quarterly volumes of TEUs handled by Sohar Port. The volumes of the 1 st Quarter of 2020 and
the 1st quarter of 2019 are almost the same. While the 2nd quarter of 2020 was down by 7% compared to the 2nd
quarter of 2019. The 3rd quarter of 2020 shows about 1.4% more than the 3rd quarter of 2019 and over 7%
compared to the 2nd quarter of 2020. Overall, the three-quarters of 2020 is down 2% compared to 2019. The
year-end volume is yet to be achieved as the businesses started to open, while many face immense cashflow
pressures due to the low and some cases that suffer almost no income.
Sohar Port - TEUs and Vessels
1,600
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
-
1,400
1,200
1,000
800
600
400
200
2012 2013 2014 2015 2016 2017 2018 2019 2020e
Vessels
TEUs/Vessel
TEUs
Figure 15: Sohar Port – TEUs / Vessel Calls
Page 11 of 22
Linear (Vessels)
Oman’s Economy Performance During Covid-19 with focus on Ports
MAHMOOD SAKIH ALBAUSHI
Figure 15 shows the vessel calls to Sohar Port and TEUs. The number of vessel calls has been growing since 2014.
However, the number of TEUs carried by vessels for the port has been declining since 2017. The average number
of TEUs per vessel call for the Sohar Port for the years 2018 and 2019 were 1,409 TEUs and 1,281 TEUs,
respectively and expected to be lower in 2020, reaching 1,157 TEUs.
Charts in figure 16 show the percentage shares of 40ft containers and 20ft containers handled by the container
terminal. The below chart shows the percentage of each container type. It looks that over the years, the share
of 40ft containers is increasing. This may cause a shortage of 20ft containers, which are mostly used for exports
from Oman. The percentage of 40ft containers has been growing since 2016, reaching 57% in 2020.
Sohar Port - Containers % of 40ft and 20ft
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Sohar Port - Containers 40ft and 20ft
350,000
300,000
250,000
200,000
150,000
100,000
50,000
2012
2013
2014
2015
2016
2017
2018
2019 2020e
20ft
56%
54%
57%
51%
49%
47%
50%
44%
43%
40ft
44%
46%
43%
49%
51%
53%
50%
56%
57%
2012 2013 2014 2015 2016 2017 2018 2019 2020e
40ft
20ft
Figure 16: Volumes & Shares of 40ft and 20ft containers at Sohar Port
The container terminal has been handling Freight Tons (FRTs) of containers, as shown in the charts in figure 17.
Sohar Ports FRTs of Containers
Sohar Ports FRTs of Containers
3,000,000
10,000,000
2,500,000
8,000,000
2,000,000
6,000,000
1,500,000
70%
60%
50%
40%
30%
20%
10%
0%
-10%
4,000,000
1,000,000
2,000,000
500,000
-
2012 2013 2014 2015 2016 2017 2018 2019 2020
Q1
Q2
Q3
Q4
FRT Cont
Change%
Figure 17: FRTs handled at Sohar Port
The average FRT per container has always been at an average of 10FRT per container over the past years. The
total of the FRTs has been declining for the last few years and getting more pressure now due to the Coronavirus.
Therefore, the decline most probably continues in the fourth quarter of 2020 as the Covid-19 crisis continues to
impact the business and trade.
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Oman’s Economy Performance During Covid-19 with focus on Ports
MAHMOOD SAKIH ALBAUSHI
5.2 Break-bulk and Dry-Bulk Terminal at Sohar Port
The break-bulk and dry-bulk terminal is managed and operated by C. Steinweg Oman company. The company
was established in early 2004. The dry bulk mainly includes grain, minerals, and aggregate. The break-bulk
includes timber and steel, in addition to project cargo. Steinweg also handles RoRo. The iron ore is handled by
Vale Company through a dedicated jetty.
Figure 18: Photos of Sohar Port General Cargo Terminal and Vale Jetty
Dry Bulk at Sohar Port:
The quarterly dry bulk volumes handled at Sohar Port are shown in the charts in figure 19.
Sohar Port Dry Bulk (MT)
Sohar Port - Dry Bulk (MT)
12,000,000
40,000,000
30%
10,000,000
35,000,000
25%
30,000,000
20%
8,000,000
15%
25,000,000
6,000,000
20,000,000
4,000,000
15,000,000
2,000,000
Q3
0%
-5%
5,000,000
-10%
2012 2013 2014 2015 2016 2017 2018 2019 2020
Q2
5%
10,000,000
Q1
10%
Q4
-
-15%
2012 2013 2014 2015 2016 2017 2018 2019 2020e
Tons
Change%
Figure 19: Dry Bulk volumes handled by C. Steinweg Terminal at Sohar Port
During the first three quarters of 2020, the Dry Bulk Terminal handled almost the same in 2019 (with a small
drop of 1.3% only). The Dry Bulk Terminal is expected to handle over 35 million tons in 2020 compared to over
36 million tons. It is forecasted that about a 2% decrease in 2020 after a continuous growth of CAGR 16.21%
since 2016.
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Oman’s Economy Performance During Covid-19 with focus on Ports
MAHMOOD SAKIH ALBAUSHI
Break Bulk at Sohar Port:
Sohar Port Break Bulk (MT)
Sohar Port Break Bulk (MT)
800,000
2,500,000
60%
50%
700,000
40%
2,000,000
600,000
30%
500,000
20%
1,500,000
10%
400,000
300,000
0%
1,000,000
200,000
-10%
-20%
500,000
100,000
-30%
-40%
2012 2013 2014 2015 2016 2017 2018 2019 2020
Q1
Q2
Q3
-
-50%
2012 2013 2014 2015 2016 2017 2018 2019 2020e
Q4
Tons
Change%
Figure 20: Break-Bulk volumes handled by C. Steinweg Terminal at Sohar Port
The breakbulk cargo volumes are shown in the charts in figure 20. Based on the volumes and trend in the first
three quarters of 2020 and despite the Covid-19 impacts, the break-bulk volumes are expected to grow in 2020
by 21%. However, as the effects on businesses are yet to get revealed, growth in the last quarter is a challenging
goal. The previous years 2017, 2018, and 2019 all had continuous declining figures, a drop of 40% from 2016.
The performance of the breakbulk trade needs to have a more detailed analysis of the future expected volumes
and growth.
5.3 Liquid Terminal
The liquid terminal is managed and operated by the Oiltanking Terminals Company. It has 66 tanks with tanks
capacity of 1,395,278 cbm. The Jetty capacities can handle 120,000 dwt. The products handled include
petroleum products, petrochemical, and gases.
Figure 21: Oiltanking Liquid Terminal at Sohar Port
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Oman’s Economy Performance During Covid-19 with focus on Ports
Sohar Port Liquid Terminal
MAHMOOD SAKIH ALBAUSHI
Sohar Port - Liquid Terminal volumes
6,000,000
5,000,000
20,000,000
20%
18,000,000
15%
16,000,000
10%
14,000,000
4,000,000
3,000,000
2,000,000
12,000,000
5%
10,000,000
0%
8,000,000
-5%
6,000,000
-10%
4,000,000
1,000,000
-15%
2,000,000
-
2012 2013 2014 2015 2016 2017 2018 2019 2020
Q1
Q2
Q3
-20%
2012 2013 2014 2015 2016 2017 2018 2019 2020e
Q4
CBM
Change%
Figure 22: Volumes handled by Liquid Terminal at Sohar Port
The volume in 2019 was lower than in 2018, but it is expected to be a little higher in 2020 despite Covid-19. The
liquid terminal has not experienced any significant growth as the overall range has been around 16 million CBM
since 2012 except for 2016 when it almost hit 19 million CBM.
Sohar Port - Liquid Terminal volumes/vessels
20,000,000
25,000
18,000,000
16,000,000
20,000
14,000,000
12,000,000
15,000
10,000,000
8,000,000
10,000
6,000,000
4,000,000
5,000
2,000,000
-
2012
2013
2014
CBM
2015
2016
2017
Ships
2018
2019 2020e
CBM per Ship
Figure 23: Sohar Port – Liquid Terminal Volumes/vessels
The liquid vessel calls have been 834 ships since 2012. The volume per vessel has been around 83,419.791 CBM
on average. No growth is expected for this terminal despite the location of Oman’s main oil refinery inside the
Port; Sohar Refinery. The business potentials of the liquid terminal are high and need to be explored by the
government.
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Oman’s Economy Performance During Covid-19 with focus on Ports
MAHMOOD SAKIH ALBAUSHI
6. Salalah Port
Salalah Port is located far south of Oman on the Indian Ocean. It has developed itself to be one of the major
deep-sea ports and among the world's top efficient ports in handling the containers’ moves. The port is managed
by Port of Salalah Company, which is a public company. All terminals at the port are managed and operated by
APM Terminals with a 30% stake in the company. The port has all types of cargo handling berths. The main one
is the container terminal. Other terminals include general cargo terminal and liquid terminal. The port
commenced operations in 1998. It is considered the main mega port in Oman and one of the biggest in the
region to handle transshipment cargo.
Figure 24: Salalah Port (Google map), managed by APM Terminals
6.1 Container Terminal - Salalah Port:
The container terminal is the heart of the Salalah port. The transshipment container operation is the mainstay
of the port business. The port has experienced continuous growth with double-digit growth year-on-year during
2003-2010. The main success factors, according to the Port of Salalah, are location advantages, congestion-free
deep-sea berths, competitive service level, and consistently high productivity.
Figure 25: Container Terminal at Salalah Port
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Oman’s Economy Performance During Covid-19 with focus on Ports
MAHMOOD SAKIH ALBAUSHI
The container terminal has handled the following TEUs volumes since it commenced operations in 1998 (see
figure 26). Most of the handling has been for transshipment containers.
Salalah Port - TUEs
5,000,000
70%
4,500,000
60%
4,000,000
50%
3,500,000
40%
3,000,000
30%
2,500,000
20%
2,000,000
10%
1,500,000
0%
1,000,000
-10%
500,000
-
-20%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
TEUs
Change %
Figure 26: Containers TEUs handled at Salalah Port
Salalah Port has enjoyed steady growth for the first ten years from its commencement of operations in 1998.
The fluctuation started in 2009 and continues to date. The year 2018 had a significant drop of 14%, while 2019
had a big increase of 18%. Despite the Covid-19, the year 2020 is expected to have a growth of 4% due to the
expected transshipment trade and high volume handled in the 1st quarter of 2020. The 4th quarter is expected
to be around 3% lower than 3rd quarter figures. Even the 3% growth estimate could be challenging due to the
Coronavirus effects on businesses and consumers.
The quarterly analysis of container volumes (see figure 27) shows the first quarter handled about 28% more than
the previous year, while the second-quarter handled almost the same (but last year had over 12% growth). The
third quarter declined by around 3%. Though the first quarter of 2020 had exceptional growth compared with
the previous year, the second and third quarters had declining figures, which expected to continue.
Salalah Port - Containers per Quarter
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
-
Salalah Port - TUEs
5,000,000
40%
4,000,000
30%
20%
3,000,000
10%
2,000,000
0%
1,000,000
2016
2017
Q1
Q2
2018
Q3
2019
2020
Q4
-10%
-
-20%
2016 2017
Figure 27: Quarterly Containers TEUs handled at Salalah Port
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2018 2019 2020e
Oman’s Economy Performance During Covid-19 with focus on Ports
MAHMOOD SAKIH ALBAUSHI
6.2 General Cargo Terminal – Salalah Port
The general cargo terminal handles a wide range of vessel types and various types of products; dry bulk and
break-bulk cargo. The main products handled by this terminal include limestone, cement, livestock, project
cargo, and other dry bulk commodities.
Figure 28: General Cargo Terminal at Salalah Port
The general cargo terminal has had sturdy growth volumes over the years since the inception of the operations
in 1998. The below chart shows the growth success story in the last few years. However, the general cargo
volumes are expected to face significant challenges in 2020 due to the general impact of Coronavirus.
Salalah Port - Dry Bulk and Break Bulk Cargo
Salalah Port - Dry Bulk and Break Bulk Cargo
4,500,000
4,000,000
3,500,000
14,000,000
25%
12,000,000
20%
15%
10,000,000
3,000,000
10%
2,500,000
8,000,000
5%
2,000,000
6,000,000
0%
1,500,000
-5%
4,000,000
1,000,000
-10%
2,000,000
500,000
-15%
-
2016
2017
Q1
Q2
2018
Q3
2019
2020
-20%
2016
2017
2018
2019
Salalah Port - Dry Bulk and Break Bulk Cargo
Q4
2020e
Change %
Figure 29: General Cargo Volumes handled at Salalah Port
The overall operations are divided into two categories; one for dry bulk and general break-bulk cargo, the other
is for bagged cargo. The general dry-bulk and break-bulk cargos have been rising, but the Covid-19 seems to
have negative impacts on the expected volumes in 2020 despite the increase in the third quarter of 2020 by
25%.
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Oman’s Economy Performance During Covid-19 with focus on Ports
Salalah Port - Bagged Cargo
MAHMOOD SAKIH ALBAUSHI
Salalah Port - Bagged Cargo
300,000
1,000,000
250,000
80%
60%
800,000
200,000
40%
600,000
20%
100,000
400,000
0%
50,000
200,000
150,000
2016
2017
Q1
2018
Q2
Q3
2019
2020
-20%
-40%
-
-60%
2016
Q4
2017
2018
Bagged Cargo
2019
2020e
Change %
Figure 30: General Cargo Volumes handled at Salalah Port
The bagged cargo at Salalah Port has also enjoyed significant growth over the years, with an exceptional big drop
in 2017 by 47%. The overall bagged cargo to be handled in 2020 is expected to grow by 15%.
6.3 Liquid Terminal – Salalah Port
The liquid Terminal at
Salalah Port is also operated
by APM Terminals. It is a
deep-sea liquid terminal.
This has helped to improve
the overall port capacity and
performance.
Salalah Port - Liquid Terminal
Salalah Port - Liquid Terminal
2,400,000
2,350,000
2,300,000
2,250,000
2,200,000
2,150,000
2,100,000
2,050,000
2,000,000
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
2016
2017
Q1
2018
Q2
Q3
2019
8%
6%
4%
2%
0%
-2%
-4%
-6%
2016
2020
2017
Liquid
Q4
2018
2019
2020e
Change %
Figure 31: General Cargo Volumes handled at Salalah Port
The overall performance of the liquid terminal has been very volatile. Initially, it started with a growth trend but
started to drop from the last year 2019. With new connectivity being constructed by OQ of the new pipelines
directly with the port will definitely increase the volumes and hence a growth is envisaged in the coming years.
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Oman’s Economy Performance During Covid-19 with focus on Ports
MAHMOOD SAKIH ALBAUSHI
7. The future
Due to the coronavirus pandemic, the pressure on both demand and freight rates continue. So, exceptional
uncertainty still is the name of the game for the coming months and possibly coming years. The volatility of
demand and supply continues with no clear vaccine for Coronavirus.
The last quarter of 2020 could be going in any direction and may not have any links to the first three quarters or
the previous years' trends. So, ports need to properly manage the resources in the short-term and plan
investments for the long-term very carefully so they don’t incur additional expenses while not missing new
opportunities as the demand and supply may change over the coming months.
According to Drewry and UNCTAD reports, the container volumes would face a contraction of 8.1% in 2020,
mainly because of the Coronavirus, while the year 2021 expects a growth of 13%.
TEUs handled by World ports (2020 & 2021 estimates)
225
175
125
75
25
-25
TEUs (Million) Forecast
860
833
840
820
800
13.0%
Increase
802
780
760
8.1%
Decrease
737
740
720
700
680
2019
2020
2021
Figure 32: Drewry and UNCTAD Reports 2020 on World TEUs volumes current and future estimates
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Oman’s Economy Performance During Covid-19 with focus on Ports
MAHMOOD SAKIH ALBAUSHI
Omani ports are well established as deep-sea ports and strategically located on the Indian Ocean. Sohar Port is
strategically located outside the Strait of Hormuz, connecting the Gulf to the region and the world. It is the main
industrial and commercial port of Oman. The port needs to be more proactive to attract more international
direct routes and larger mother vessels. Sohar Ports is also well connected through its hinterland to GCC
countries and beyond.
Salalah Port is the largest port in Oman, with a capacity of 5 million TEUs. The majority of business in Salalah
Port compromises of transshipment containers. The port needs to be more competitive to attract more
transshipment lines and support the local exports and imports with competitive rates and services. Salalah Port
is also well connected through a bonded-land-road lane to the huge market in Yemen through Mazuanah Dry
Port.
Duqm Port is the latest deep-sea port to join Sohar and Salalah ports. The port is operational while it needs to
complete its full infrastructure and equipment that are required in order to operate with full capacity. The port
is part of the mega economic city, Special Economic Zone at Duqm. The zone houses mega projects, such as the
Duqm refinery and crude oil storage facilities.
The ports need to study the future of the mother vessels. In recent years, the capacity of vessels and size have
grown massively. The vessel capacity jumped from 15,000 TEUs to close to 24,000 TEUs in just few years. HMM
has the biggest Triple E vessels (also called MegaMax) with capacity of 24,000 TEUs. The Triple E (EEE) stands for
Economies of scale, Energy efficiency, and Environmentally friendly. The average size of a Triple-E Class ship is
about 400 meters in length, 60 to 73 meters in width to accommodate over 25 container rows and over 54
meters in height. The ports need to plan how to handle such sizes that need new cranes that reach further and
higher. Other areas of concern are new technologies and faster speed in operations to achieve a shorter
turnaround time for the ships.
Figure 33: HMM’s Triple E vessel and Salalah Port
It is a good time for Oman to take the opportunities that arise from the challenges and attract more new
investments and maritime routes to its world-class ports that enjoy exceptional and excellent free zones and
economic zones attached to them. The Omani ports need to manage capacity and mitigate the expenses while
marketing the services and incentives to current and potential clients. Asyad Group and the newly established
government agency, Public Authority for Special Economic Zones and Free Zones, have a great role to play in
developing and facilitating potential opportunities for investors and businesses, and hence enhancing Oman as
a great and attractive logistics hub in the region.
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Oman’s Economy Performance During Covid-19 with focus on Ports
References:
apmterminals.com
alphaliner.com
Asyad.om
Customs.gov.om
drewry.co.uk
google.com/maps/
hmm21.com
hutchisonports.com
Jindalshadeed.com
maersk.com
marafi.om
NCSI.gov.om
oiltanking.com
Oman.Steinweg.com
portofduqm.om
SalalahPort.com
SoharPortAndFreeZone.com
worldbank.org
unctad.org
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MAHMOOD SAKIH ALBAUSHI