Oil Bourse Opens in Kish

TEHRAN (FNA) – Iranian Oil Ministry Sunday announced the launch of operation by the country’s first oil products bourse in the free trade zone on the Persian Gulf Island of Kish.A statement posted on the ministry’s Web site said 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, the statement quoted Iranian Oil Minister Gholam Hossein Nozari as saying. About 20 brokers are already active in the market, it said.

“The bourse provides an economic opportunity for Iranians, other countries and foreign customers,” Nozari was quoted as saying.

Iran produces more than 20 mln 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 the IRNA official news agency that such an oil market would begin operating within the next year.

While most oil markets are traded in US 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 the nationalist Mahmoud Ahmadinejad was elected in 2005.

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

Iran has not yet wielded its oil resources as a bargaining tool in its ongoing standoff with the West over its nuclear program.

The UN Security Council is considering imposing a third set of sanctions on Iran for defying a request to halt uranium enrichment. But Tehran has expressed doubt that the world body would impose sanctions on the country’s oil sector, because such a move would likely drive global oil prices higher.

The United States has been pressing companies and governments to cut ties with Iran, while Tehran has urged foreign firms and capitals to ignore the US pressure.

The US is at loggerheads with Iran over Tehran’s independent and home-grown nuclear technology. Washington has laid much pressure on Iran to make it give up the most sensitive and advanced part of the technology, which is uranium enrichment, a process used for producing nuclear fuel for power plants.

Washington’s push for additional UN penalties contradicted the recent report by 16 US intelligence bodies that endorsed the civilian nature of Iran’s programs. Following the US National Intelligence Estimate (NIE) and a similar report by the IAEA head in November which praised Iran’s truthfulness about key aspects of its past nuclear activities, Russia and China increased resistance to any further punitive measures by the Security Council.

Tehran says it never worked on atomic weapons and wants to enrich uranium merely for civilian purposes, including generation of electricity, a claim substantiated by the NIE and IAEA reports.

Iran has insisted it would continue enriching uranium because it needs to provide fuel to a 300-megawatt light-water reactor it is building in the southwestern town of Darkhovin.

Not only many Iranian officials, including President Mahmoud Ahmadinejad, but also many other world nations have called the UN Security Council pressure unjustified, especially in the wake of recent IAEA reports saying Iran had increased cooperation with the agency.

US President George W. Bush, who finished a tour of the Middle East earlier this month has called on his Arab allies to unite against Iran.

But hosting officials of the regional nations dismissed Bush’s allegations, describing Tehran as a good friend of their countries.

Bush’s attempt to rally international pressure against Iran has lost steam due to the growing international vigilance, specially following the latest IAEA and US intelligence reports.