President Trump threatened to bomb Oman last month, a move that stunned diplomats and investors alike. The quiet Gulf sultanate, long‑standing U.S. ally and mediator with Tehran, has been accused by Washington of being too sympathetic to Iran. Oman’s foreign minister Badr al‑Busaidi publicly called the U.S.–Israel war “illegal,” prompting further ire.

Oman’s strategic ports outside the Strait of Hormuz allowed it to keep oil flowing while neighboring Gulf states saw revenues plunge. In Q1, government income rose 13 percent, and cargo once bound for the UAE now transits Muscat, spurring calls for pipelines and rail links. Business leader Tawfeeq Al Lawati called the crisis a “historic opportunity” for infrastructure investment.

Trump’s anger stemmed from Oman’s discussion of charging service fees for vessels transiting the strait, which the White House framed as a “toll” threat to navigation freedom. The sultanate kept silent on bomb remark, but its continued mediation and congratulating Iran’s new supreme leader strained ties with Saudi Arabia, the UAE and Kuwait, widening Gulf fissures. Analysts warn the diplomatic rift could deter foreign investment.