Iran 'euro-based' oil bourse underway

Mar 11, 2007

An official said that the managing director of Iran's first petroleum exchange "Iran Oil Bourse" is expected to be appointed soon, bringing the oil-rich nation a step closer to opening its first 'oil bourse'. Majid Shayesteh, managing director of Kish Free Trade Zone Organization, said that President Mahmud Ahmadinejad has directed Iran's ministers of oil, economic affairs and finance to appoint the board of directors of the oil exchange and its managing director. He did not specify when exactly the exchange would open.

He also said the building which will house Iran's first oil exchange has been constructed on the Persian Gulf island of Kish and that the required technical equipment has been installed.

Shayesteh added that three major organizations are involved in the groundbreaking project, saying that coordinating efforts between the various groups initially delayed the project.

According to the official, the articles of association for the oil exchange have since been approved. Last month, a separate official announced that the petroleum exchange would begin operation "in the near future."

Mahmud Salahi, secretary of the High Council for Free Trade and Industrial Zones, had said that Iran decided to establish the euro-based oil exchange on Kish because "there was no such oil trading body in the region." The oil exchange will transact petroleum, petrochemicals and gas in various non-dollar currencies, primarily the euro. It would also establish a euro-based pricing mechanism for oil trading, or 'oil marker' as it is commonly called by traders.

Oil Minister Kazem Vaziri Hamaneh said earlier that a stock market for trade in shares of oil companies will be established in Iran's southern of Kish in the near future. While touring of a local gas transfer operation, the minister said the stock market will be set up in cooperation with the oil and finance ministries.

The stock market will be open to the public soon after the appointment of a managing director and members of a board of directors.

Last month, after a year of speculation, Iran changed its oil bourse from petrodollars to petroeuros.