Since 1970, when Qabus ibn Said assumed power, Oman's role in regional political dynamics has increased. Although remaining outside the Organization of the Petroleum Exporting Countries (OPEC), it has been a member of the GCC since its formation in May 1981. Relations between Oman and other gulf countries have improved since 1970 as long-standing territorial disputes have been resolved. Oman and the UAE resolved a border dispute in 1981 Oman and the PDRY normalized relations in 1982 and Oman and Saudi Arabia signed a treaty in 1991 ending a long-standing territorial dispute concerning the Al Buraymi Oasis.

The resolution of the Al Buraymi Oasis territorial dispute, concerning a cluster of nine villages claimed by Saudi Arabia and administered by Abu Dhabi and Oman, improved regional relations. With the discovery of oil reserves in the gulf, the revenue potential for the Al Buraymi Oasis prompted Saudi Arabia to press its claim on the disputed territory. Riyadh dispatched troops, which occupied the area in 1952. After failing to win their claim in international arbitration, the British, using the sultan's army and the Trucial Oman Scouts, reoccupied the oasis in 1955. Although the United States protested the British action, the United States was not prepared to extend military assistance to Saudi Arabia to reverse the situation. From the early 1950s onward, Saudi Arabia provided a base from which the Ibadi imam of the interior continued to challenge the authority of the Al Said dynasty.

After the 1970 coup d'état, Qabus ibn Said sought to improve and normalize relations with Saudi Arabia. Formal relations were established following a state visit by the sultan to the kingdom in December 1971. An agreement on July 29, 1974, among Oman, Saudi Arabia, and the UAE settled the Al Buraymi dispute. It stipulated that Oman would receive three villages in the region and Abu Dhabi six and that the two countries would share the oil field at Shaybah. The agreement provided Saudi Arabia with an outlet to the gulf through UAE territory.

In the course of the Dhofar rebellion, Oman received substantial financial support from Saudi Arabia, the UAE, and Kuwait, countries that feared the growth of left-wing, antimonarchist movements in their own territories. In March 1990, Saudi Arabia and Oman formalized a border pact legitimating the existing declared line separating the two countries.

The Iranian Revolution of 1979 and the fear of militant Islam among Arab gulf leaders, combined with the Iran-Iraq War and the potential interruption of tanker traffic through the Strait of Hormuz, catalyzed the formation of the GCC (which also includes Saudi Arabia, the UAE, Kuwait, Bahrain, and Qatar) (see Collective Security under the Gulf Cooperation Council , ch. 7). The GCC is theoretically a means to ensure collective security of the member states. In practice, as Iraq's 1990 invasion of Kuwait showed, it proved ineffectual in deterring and responding to aggression by neighboring states.

After the Persian Gulf War, Sultan Qabus ibn Said sug2e8 uggested the creation of a multilateral 100,000-strong collective defense force. However, Saudi Arabia scuttled the proposal, which was unpopular in Oman and in other gulf states. Objections ranged from the matter of costs and manpower needs of such a force, given the small populations of GCC member states, to the question of who would command such a force. The smaller gulf states feared a dominant Riyadh dictating terms and foreign policy.

Data as of January 1993