Cyclone Gonu pummelled Oman on Wednesday, halting oil and gas exports for a second day and forcing thousands to flee the coast, but weakened as it moved through the Arabian Sea, a major route for Gulf oil shipments.
The storm, which peaked to a maximum-force Category Five hurricane on Tuesday, has been downgraded to a Category One hurricane, with a maximum sustained wind speed of about 92 mph, the U.S. military's Joint Typhoon Warning Center said.
The centre of the storm is now expected to hit land in southeastern Iran over the next 36 hours but forecasters say it may have significantly lost power by then.
"The cyclone is forecast to turn northward in the Gulf of Oman and weaken rapidly," meteorologist Tom Moore wrote on The Weather Channel (www.weatherchannel.com).
"By the time it reaches the southern coast of Iran it may have already weakened into a tropical depression. Flash flooding will be a major threat."
Cyclone Gonu disrupted shipping, pushing oil prices toward $71 a barrel on Wednesday, their highest in nearly two weeks.
An Oman-based shipper said Mina al Fahal, the only export outlet for the country's 650,000 barrels per day of crude oil, remained shut for the second day on Wednesday as did the Sur terminal, which handles 10 million tonnes per year of liquefied natural gas exports.
"Everything is shut down. The terminals will be shut at least until tomorrow," the shipper told Reuters.
"At around 4 p.m. (1200 GMT) it will get very severe in Muscat."
Strong winds and heavy rain swept Oman, and the storm was around 60 km off the shore of Muscat, but no one had so far been killed, an Omani relief official said.
"So far we have no casualties. There has been some light to medium material damage in Sur and nearby areas but no more," Abdallah al-Harthi, spokesman for the police relief committee told Reuters.
"The storm is now heading to Muscat and we are focussing our efforts there but it has weakened. Wind speeds have dropped dramatically."
An Omani weather official warned of flooding in low lying areas and advised people in Muscat to stay home or seek shelter in strong buildings that could resist strong winds and rain.
All private and public sector institutions, including the stock exchange, were closed through to Saturday due to the storm.
Oman's weather centre, which has been keeping records since 1890, says Gonu is the strongest storm to reach Oman's coast since a destructive one in 1977.
The last hurricane-strength tropical cyclone to hit Iran was in 1945, Moore wrote in his report, though meteorologists say that milder tropical storms are common in the Arabian Sea from mid-May to the end of June.
To the more sheltered west of Oman, the world's top oil exporter Saudi Arabia, has repeated that its main oil region was safe though it was monitoring the storm and had an emergency plan in place.
Kuwait's oil refining company said on Tuesday everything was working as normal in the OPEC producer.