Free zones have long been recognized as a means of increasing foreign direct investment (FDI), generating employment, boosting exports in strategic sectors, and transferring skills to local workforces. In Gulf Cooperation Council (GCC) states, free zones resemble demarcated geographic areas contained within a territory’s national boundaries where 100 percent foreign ownership is permitted and other rules of business are different than those that prevail in the national territory. GCC free zone entities are entirely government-owned and highly susceptible to exploitation by elites. In Oman, more than in any other GCC state, free zones possess overt political objectives in addition to more traditional economic goals. This paper argues that Oman’s government employed free zones from the late 1990s until present day to mitigate against civil strife, prevent future political protest, and satisfy elite interests. These objectives challenge traditional notions of free zone development, yet they neatly align with the concept that all economic institutions are political because they must have a political end in order to survive (Douglass North et al., 2009). While free zone sectors in neighboring GCC states aim to drive or complement broader economic development programs, Oman’s free zones are intrinsically linked to local and international politics. In particular, political tensions in Dhofar, Sohar, and Duqm help explain the existence of free zones in each respective territory. Oman’s free zones also establish a neutral sphere in the realm of international relations, which eases the facilitation of formal business relations with Iran. This paper adds a new scholarly dimension to two fields: i) political economy and ii) the Rentier State Theory. Despite the ubiquitous nature of free zones across the GCC, there is scant work on the political purposes of free zones and their embeddedness in broader institutions. Similarly, this analysis contributes to the developed body of work on rentier states by revealing how the Omani government accomplishes the dual aims of generating new rent streams and placating specific groups of citizens through free zone development. The paper draws heavily on primary research from data collection during onsite visits to free zones in Oman as well as oral interviews with free zone officials and editors from Omani media outlets. These interviews took place in Sohar, Muscat, Duqm, and Salalah as part of a larger, ongoing DPhil dissertation on the political economy of free zones in the GCC.