Iran Launches Oil Bourse

Iran established its oil bourse Sunday in a free trade zone on the Persian Gulf Island of Kish and 100 tons of polyethylene consignment was traded at the market’s opening on the island, which houses the offices of about 100 Iranian and foreign oil companies.

Oil and petrochemical products will be traded in Iranian rials, as well as all other hard currencies, Oil Minister Gholamhossein Nozari said. About 20 brokers are already active in the market.

“The bourse provides an economic opportunity for Iranians, other countries, and foreign customers,” Nozari noted.

Iran produces more than 20 million tons of petrochemical products per year.

Iran has already registered for another oil bourse, in which it has said it hopes to trade oil in Euros instead of dollars, to reduce any American influence over the Islamic Republic’s economy.

A bourse official, Mahdi Karbasian, told IRNA that such an oil market would begin operating within the next year.

While most oil markets are traded in U.S. dollars, Iran first floated the idea of trading oil in Euros in the early 2000s during the tenure of reformist president Mohammad Khatami. It gained new life after Mahmud Ahmadinejad was elected in 2005.

As the fourth largest oil producer in the world, Iran has a measure of influence over international oil markets, comments AP. The country ranks second for output among OPEC Countries, and controls about 5 percent of the global oil supply.

Tehran also partially controls the Persian Gulf’s Strait of Hormuz, through which much of the world’s oil supply must pass.

But Iran and its fellow U.S. foe and close ally Venezuela have openly mulled defying the United States by cutting production in March amid concerns about the effects of a U.S. economic slowdown on oil prices.

Tehran Times

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