Business | Oil & Gas
Iran opens oil exchange
Iran launched an oil exchange yesterday with the first trade made in a petrochemical product but planning to expand to include transactions in crude in future.
- Reuters
- Published: 00:08 February 18, 2008
Tehran: Iran launched an oil exchange yesterday with the first trade made in a petrochemical product but planning to expand to include transactions in crude in future.
The bourse, based on the Gulf economic free zone island of Kish, has been planned for years but has faced repeated delays.
When plans were first mooted, some analysts speculated Iran might use it to undermine the importance of the US dollar by pricing crude in euros or other currencies.
An official said trading would be in Iranian rials and other currencies approved by the central bank but gave no details. The bank has been seeking to diversify Iran's reserves away from the dollar because of US sanctions on the Islamic Republic.
Iran's state oil company has also been seeking more payments for crude exports in currencies other than the dollar.
"Trading of oil products in the first phase of the exchange can make us more competent and ready to begin the supply of crude oil in the second and long-term phase," Oil Minister Gholamhossein Nozari said.
He gave no details of when the second phase would start when he spoke to reporters in a trading room in Tehran from which dealers can also conduct business on the exchange.
After his comments, the minister gave the nod to the first trade, a transaction in the petrochemical product linear low-density polyethylene.
The bourse will also trade other oil products and industrial pipes used in the energy industry.
Oil products are currently traded domestically at subsidised prices and Iran is seeking to establish a more competitive pricing platform, the oil minister said.
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