Post by Parisa Hafezi on Oct 29, 2009 6:45:58 GMT 4
Resource Wars
Iran Opens Exchange to Trade Crude Oil and Other Petrochemical Products
Published on 10-27-2009
Source: Reuters
Iran, OPEC's second-biggest oil producer, launched its international oil exchange on Monday to buy and sell crude, oil products and petrochemical products, Iran's student news agency ISNA reported.
"The international exchange hall of crude, oil products and petrochemical goods of Iran was inaugurated. Our aim is to shift oil market trade focus in the region to the Kish Island," said Economy Minister Shamseddin Hosseini at the inauguration ceremony, ISNA reported.
The bourse, based on the Gulf economic free zone island of Kish, has been planned for years but had faced repeated delays. The first phase of the exchange for trading oil products was inaugurated in February.
When plans were first mooted, some analysts speculated Iran might use it to undermine the importance of the U.S. dollar by pricing crude in euros or other currencies.
The report did not specify the currency in which trading would take place.
Iran wants to deregulate prices of petrochemicals and other oil products and create more transparency as part of a privatisation drive, aimed at attracting more foreign investment into the country's oil industry.
But investors have shown limited interest mainly because of international sanctions imposed against Iran over its disputed nuclear programme, which the West fears is a cover to build nuclear arms, Iran denies this.
Iran is under U.S. and U.N. sanctions over its nuclear row with the West.
Oil Minister Masoud Mirkazemi, a close ally of hardline President Mahmoud Ahmadinejad, has promised to reinvigorate the Iranian hydrocarbon sector.
He has also signified Iran's need for foreign investment to develop its oil and gas industry. Iran lacks technical capabilities or funds to proceed with its energy projects.
Iran has struggled for years to develop its energy sector and now has to contend with an international lack of credit, as well as the sanctions.
Iran's petrochemical capacity expansion is likely to mainly focus on the rapid expansion programme of the country's refining capacity.
The Islamic state lacks sufficient refining capacity to meet its gasoline needs, leaving it potentially vulnerable to any Western sanctions targeting such trade.