Strong winds and heavy rain had begun to pummel the coast but the centre of the storm was expected to hit land at around seven pm (1500 GMT), bringing with it winds of up to 213 kmh (133 mph) and waves as high as 4-12 metres (yards), Ahmad al-Harthi, director of the Meteorology Department, said.

"Oman is normally affected by tropical cyclones from time to time but this is one of the severest since the 1977 storm, bearing in mind we have records going back to 1890," he said.

"It is likely to move along the coast to Muscat, then the centre of the storm will move into the Gulf of Oman proper and head northwards," he said, predicting floods in several areas.

The Mina al Fahal oil terminal, the only outlet for Oman's 650,000 barrels per day of oil exports, was closed until further notice, a shipping agent said.

The Sur export terminal, which handles 10 million tonnes per year of liquefied natural gas exports, was also shut along with the Sultan Qaboos port, which handles vehicles and containers, shipping sources said.

Oman's stock exchange would close along with all private and public sector institutions on Wednesday and Thursday, official media said.

OIL PRICES

Oil prices surged above US$70 on Monday on news of the cyclone in the Gulf region that supplies a fifth of the world's oil.

Oman's position at the mouth of the Gulf made it particularly vulnerable to the storm, which had maximum sustained winds of 125 miles per hour (mph) -- the equivalent of a Category Three hurricane -- at 0855 GMT, the US military's Joint Typhoon Warning Center said.

To the more sheltered west of Oman, the world's top oil exporter Saudi Arabia, said its main oil region would not be affected. Kuwait's oil refining company said everything was working as normal there.

The weather centre of the neighbouring United Arab Emirates, an OPEC oil exporter, said the cyclone was expected to bring rain on Wednesday with clouds emerging over its eastern coast.

"Its full strength will become apparent in the next 24 hours. In 2002, we had a similar storm. They happen in the area from mid-May to the end of June," Salama Hashshad, an official at the Central Forecasting Unit told Reuters.

Two shipping agents in the UAE said on Monday no warning had been issued there. Operations on its eastern port of Fujairah were continuing as normal.

Oman's state media had earlier said thousands of people were evacuated from the Masirah Island in the Arabian Sea but an Omani disaster relief official told Reuters that the cyclone had changed direction leaving the island unharmed.

Oman's official television station urged people to stay in their homes or go to buildings that could withstand strong winds, to avoid highways and to turn off electricity.

Oman's police had raised its status to high alert and the state media urged people to bolt and board up their doors and windows and ensure they had a supply of torches and candles.

"All the different disaster preparation and management agencies have been working throughout this week in anticipation of the worst case scenario," said Ahmad al-Harthi.

"I believe we are well-prepared."

The US military's Joint Typhoon Warning Center forecast that, after passing Oman, the storm would head towards Iran across the Gulf of Oman, a major shipping channel.