Saudi-Iran crisis, economic woes strain Oman's neutrality

FILE PHOTO: Oman's Sultan Qaboos bin Said attends the International Conference on Global Fight against Terrorism in Tehran June 25, 2011. REUTERS/Raheb Homavandi/File Photo

MUSCAT (Reuters) - Caught between two vast neighbours locked in a regional struggle, Oman has long been to the Middle East what neutral Switzerland is to global diplomacy. But now its policy of being "friends to all and enemy to none" is under heavy strain.

Oman has never found it easy to balance relations with Saudi Arabia to the west and Iran to the north, but worsening rivalry between the region's dominant Sunni and Shi'ite powers is testing its cherished policy of non-alignment more than ever.