Analysts polled by Reuters had expected a larger fiscal surplus this year, while the Gulf Arab sultanate had budgeted for a deficit.

Most states in the world's top oil exporting region are expected to run budget surpluses this year despite increased spending as oil prices remain well above assumptions.

"We expect to achieve an average oil price of between $70 and $75 per barrel this year, and that's enough to wipe out the deficit and even make a surplus of around 400 million rials," the Economy Ministry official, who did not want to be identified, told Reuters.

This would put Oman's budget surplus at around 2.3 percent of gross domestic product this year, according to Reuters calculations. Analysts polled by Reuters forecast a fiscal surplus of 4.0 percent of GDP in 2010.

The non-OPEC oil producer set its 2010 budget with a deficit of 800 million rials and expenditure of 7.18 billion, 12 percent higher than planned a year earlier.

The calculation was based on a $50 per barrel oil price while the Gulf state sold its crude at an average of $77.57 a barrel in the first half of the year.

Benchmark US crude prices held steady on Monday after touching a two-month high near $82 a barrel.

Oman's budget surplus widened to 702.8 million rials at the end of June. Crude oil sales accounted for 67 percent of Oman's income last year.

A Finance Ministry official told Reuters last month Oman planned to stick to its spending plan this year, and had used nearly 63 percent of its 2010 budget in the first eight months.

Oman largely overshot its expenditure plans in the past two years to help the economy through the global downturn, but inflationary pressures are on the rise this year.

The sultanate is spending heavily on its infrastructure, building three new airports. It also plans to upgrade its main airports in Muscat and Salalah, its second largest city.