Muscat is on pace to halve its deficit this year on the back of $70/B oil, but stagnant non-hydrocarbon revenues leave the country vulnerable to a downturn in crude prices.

Oman’s public deficit through the first nine months of 2018 has shrunk to $3.48bn (1.34bn Omani Rials) from $6.39bn over the same period last year – a 46% decrease that reflects the all-powerful role international oil prices play in Muscat’s economic wellbeing. If the government can keep end-year...