Omans leader, Sultan Qaboos bin Said al-Said, has made the first official visit by a foreign head of state to Iran since the election of President Hassan Rouhani, in a move viewed as paving the way for talks between the US and the Islamic Republic over its nuclear programme.
After his win, Rouhani stated that his intent is to become more open to dialogue with the West. Local newspapers reported that a key reason for Sultan Qaboos visit was to act as an intermediary between Iran and the West in negotiations on Tehrans nuclear ambitions and the resulting economic sanctions.
According to local newspaper Khorasan, the sultan brought a proposal for the US and its allies to allow Iran back into the Swift international financial transfer system in exchange for a reduction in uranium enrichment activities. There was, however, no mention by any of the Omani officials that the delegation was engaging in diplomacy for the West.
Muscat has a long history of diplomatic ties with Tehran, bucking the trend of the wider GCC region as Abu Dhabi and Riyadh become increasingly agitated about the perceived threat across the Gulf. Oman played a key role as a diplomatic middleman throughout the 1980-88 Iran-Iraq war, with secret ceasefire talks held in Muscat during the conflict.
Unlike other GCC countries, Oman has not publicly voiced concerns about Irans nuclear programme. Muscats official position on the programme states: The sultanate hopes Washington will engage in a direct dialogue with Tehran to resolve the crisis over [its] nuclear programme.
The sultanate has no reason not to believe Irans assurances that the nuclear scheme has purely civilian purposes. This region, no doubt, does not want to see any military confrontation or any tension.
The GCC states have largely backed the US on international sanctions against Irans financial and energy sectors, which Washington imposed to pressure Tehran into increasing the transparency of its nuclear activities.
In the UAE, despite housing a large Iranian community, tensions exist over the ownership of three disputed islands in the Gulf, while Tehran has criticised Abu Dhabi for letting France establish its first permanent Gulf airbase in the UAE.
Relations between Saudi Arabia and Iran have been strained since the Iran-Iraq war in the 1980s, and have intensified since the American invasion of Iraq and the Saudi-led military intervention in Bahrain to quell unrest in the Shia population. The rivalry between the two countries has emerged in a proxy war in Syria between the Tehran-backed President Bashar al-Assad and opposition groups funded by Saudi Arabia.
Sultan Qaboos three-day visit to the Islamic Republic, starting on 25 August, included meetings with Supreme Leader Ayatollah Ali Khamenei, Rouhani and Irans new foreign minister, Mohammad Javad Zarif.
During the visit, the respective oil ministers Irans Bijan Namdar Zanganeh and Omans Mohammed bin Hamad al-Rumhy resurrected discussions on a gas pipeline between the two countries.
Iran and Oman have an excellent relationship; their leaderships are very close, Al-Rumhy told Irans Fars News Agency (FNA). The political understanding has been excellent all these years and there are historic links between the two countries.
We have discussed a number of issues in the past about putting up a pipeline. Both countries are keen to see that scheme implemented. So the agreement we signed [on 26 August] was to go back to those ideas and see how we can develop them into real projects.
Zanganeh said the two countries reached an agreement under which the Islamic Republic will start exporting gas to Oman within the next two years, according to FNA. The minister said a 25-year agreement would be worth about $65bn at todays natural gas prices.
Such a project would give Tehran an important source of extra revenue at a time when its oil exports are crippled by US and EU sanctions. Irans gas exports to Turkey do not appear to have been affected by the sanctions, however, with Turkish pipeline imports almost flat in 2012 against the previous year.
Zanganeh said he is choosing an Iranian consultant to examine the technical and financial feasibility of the gas pipeline scheme and possible routes, and added that pipe-laying operations will start soon after a final decision is made on the route, according to FNA.
But two years is an extremely ambitious timeframe for a major cross-border link and the two parties have yet to agree a solid plan. There will undoubtedly be pressure on Muscat from its GCC allies and the West against providing huge revenues to Tehran at a time when Washington is attempting to squeeze the Islamic Republics hydrocarbons exports.