The Sultanate of Oman is a state in the southeastern corner of the Arabian Peninsula. It was known as Muscat and Oman until 1970. The country is bordered on the northeast by the Gulf of Oman and on the east and south by the Arabian Sea. To the southwest is the People's Democratic Republic of Yemen. Oman's border to the west with Saudi Arabia is undefined, which accounts for variations in estimates of the country's size. A conservative estimate is 82,000 square miles (212,000 sq km). On the northwest and north it is bounded by the United Arab Emirates, which on the north divides the country from its northern extension on the Musandam peninsula. Muscat (Masqat), the capital, is on the Gulf of Oman. Matrah, the country's commercial center, is 3 miles (4.8 km) north of Oman, from which it is separated by lava hills.
Arid hills and mountains, gravel flats, and sand deserts cover most of the country, in which intense summer heat and insufficient water restrict fanning. The two most productive sections for farming are Batman, the coastal plain northwest of Muscat, and a fertile crescent between the sea and the Qara Mountains in the southern province of Dhofar. Date palms and wheat are grown in Batinah, whereas sugarcane and livestock are the chief agricultural products in Dhofar. About 40,000 people live in Dhofar, whose capital is Salalah.
The townspeople of Oman consist mostly of pure Arabs, Indians, Pakistanis, Africans, and Persians. Outside the towns the people are mostly Arabs. Most Omanis are Muslims. The language of the country is Arabic.
Oman's chief revenues come from oil, drilled from fields near the edge of the Rub al-Khali (Empty Quarter) on Oman's western border. The export of oil was begun in 1967. By the early 1970's the sultanate's annual oil royalties amounted to about $150 million. Oman's output Is relatively small- about 0.5% of world production. It provides only 2% of the Middle East's production, and its reserves are limited.
About one third of its oil goes to Japan, with most of the rest to Europe. Its other exports are chiefly agricultural, since there are no industries of any importance. Dates (most of which are shipped to India), limes, and pomegranates form the bulk of these exports. The chief imports are1 rice, wheat, sugar, cement, and cotton piece goods. Oman's trade is primarily with Britain, India, Pakistan, and the Persian Gulf states.
The seaport of Muscat and a considerable hinterland were secured in the early 16th century by the Portuguese under Afonso de Albuquerque. Their influence waned in the 17th century. Gradually the Omanis gained control of the shipping routes in the Persian Gulf and off the East African coast, trading in frankincense, ivory, and pearls. For a period Socotra, Zanzibar, and part of the East African mainland were subject to Oman's power. It was only in 1958 that Gwadar, a port on the Makran coast of Baluchistan (now in Pakistan), and adjoining territory were yielded to Pakistan.
The present dynasty was established in Oman in 1749. In the 19th century the sultanate developed a special relationship with Britain, which since that time has been involved in Oman's foreign affairs and the Omani Army.
By 1964 the commercial exploitation of Oman's oil reserves had begun, and Oman could no longer shut out the modern world. On July 23, 1970, the repressive rule of Sultan Said Bin Taimur came to an end when he was overthrown by Qabus Bin Said, his English-educated son. Qabus immediately began a program of reform, modernization, and economic development. However, since the late 1960's more than half of Oman's total budget has been spent on warfare with rebels in the province of Dhofar. The rebels have received considerable support from the Chinese Communists and the People's Democratic Republic of Yemen.