In the Sultanate of Oman, Sultan Qaboos bin Sa’id Al Sa’id is the monarch. There are no political parties; the Sultan appoints the judiciary. While maintaining the ruling family’s long tradition of firm control over all-important matters affecting the state, Sultan Qaboos has emphasized nation building. Since his accession in 1970, Sultan Qaboos has balanced tribal, regional, and ethnic interests in composing the national administration. Much decision making is consensual in accordance with long-standing tradition. The Council of Ministers, which functions as a Cabinet, is appointed by Sultan Qaboos. The Majlis al-Shura, or Consultative Council, was established in 1991 and represents Sultan Qaboos’ measured effort to broaden popular participation in Government. The Consultative Council’s mandate is to review legislation pertaining to economic development and social services prior to it becoming law. The Majlis may request ministers to appear before it. In October 1997, over 50,000 Omani men and women voted for some 700 male and female candidates to the 82 seats in the Majlis Al-Shura. The plebiscite was expanded for the September 2000 elections when 100,000 voters decided the members of the 83-seat body. Suffrage was further expanded in 2003. Under the new system, every citizen of Omani origin, male and female aged 21 and above, is eligible to vote. These changes will be effective beginning for the upcoming elections in September 2003.

In November 1996, Sultan Qaboos presented his people with the “Basic Statute of the State,” Oman's (and the Arab Gulf states’) first written constitution. It guarantees various rights, within the framework of Shariah (Islamic) and customary law. It partially resuscitated long-dormant conflict-of-interest measures by banning cabinet ministers from being officers of public share-holding firms. The same restriction was applied to under secretaries (deputy ministers) in 1998.

The government of Oman fully supports the war against terrorism. Internal stability and security are high priorities of the government, given the tensions in the region and the threat of terrorism. Oman seeks friendly relations with all countries. Oman maintained its diplomatic relations with Iraq throughout the Desert Storm era, and used this position to urge Iraq to comply fully with UN Security Council resolutions. Oman and Iran maintain political relations and have longstanding ties. In addition to its historical ties to east and central Africa, Oman is a founding member of the Indian Ocean Rim Association for Regional Cooperation (IORARC), which focuses on promoting trade between the 14 member states in Africa, the Middle East and South Asia. In general, regional political events have little impact on Oman’s economy except as they affect oil prices. Some investors may shy away from considering Oman because of concerns for regional stability, despite Omani stability.

Oman has long advocated peace between the Israelis and Palestinians. Oman participated in the Multilateral Working Group effort that emerged from the Madrid discussions. Oman played an active role in the Working Group on Water Resources, which resulted in the 1997 opening of the Middle East Desalination Research Center, headquartered in Muscat. Oman hosted the first official Israeli delegation to the Gulf region, and, in 1996, Oman and Israel exchanged trade missions. Oman closed the Israeli trade office in Muscat in October 2000 in the wake of the unprecedented public demonstrations following the beginning of renewed conflict and tension in the West Bank/Gaza.

The United States and Oman share interest in maintaining political stability in the area, and keeping open and secure the Strait of Hormuz. The United States supports the efforts of the Sultanate to increase popular participation in government policy-making and in serving as a moderating, stabilizing force in regional and international affairs.