The US and Israel launched wide-ranging strikes on Iran in February, killing the country's supreme leader and sparking the ongoing Iran war.
The Strait of Hormuz, one of the world's most vital shipping lanes, has been effectively closed since then.
King Charles, Queen Camilla, Prince William and Catherine and Princess Anne were among the royals on duty at Windsor for the state visit.
It was the first state banquet for Prime Minister Andy Burnham, who was seated next to the Omani academic and novelist, Jokha Alharthi.
It was a table laden with elaborate candelabra and polished decorations, with five glasses per setting, and even the surface of the salt had an imprint of the cypher of King Charles.
The hot summer meant a bumper crop of pomegranates in the Windsor Castle gardens, and the fruits were placed on the table alongside the floral decorations.
The King's speech, delivered to 160 guests in English with some quotes in Arabic, expressed his approval that his son Prince William had worked on an expedition project alongside the Sultan's son.
"There can be few happier symbols of success than a living relationship being passed from one generation to the next," said the King.
Earlier on this grey autumn day, the Omani delegation had been formally welcomed by the King and Queen, before a carriage procession to Windsor Castle.
State visits are a mix of pageantry and politics, with the carefully choreographed hospitality providing an opportunity for talks about business and military links.
During his visit to the UK, the Sultan's delegation will be meeting UK business representatives.
This visit is taking place against the sensitive background of tensions in the Middle East, with Oman facing Iran, on the other side of the strategically important Strait of Hormuz and the Gulf of Oman.
The King's speech emphasised the long partnership between the UK and Oman and the importance of Oman's efforts at bridge building in a time of conflict.
In response, the Sultan had said his country "seeks solutions... we believe in dialogue".
On Wednesday, the Sultan will head to Downing Street for a meeting with the prime minister, where the two leaders are expected to sign a deal to "accelerate mutual investment" between Oman and the UK.
The Foreign Office said the deal will result in over £1bn of new investment, and generate jobs and opportunity across both countries.
Source: BBC News · Sean Coughlan
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