Iran’s Oil Bourse Set to Open Sunday
Iranian Oil minister Gholamhossein Nozari has confirmed to Iranian news outlets that the long awaited oil bourse will begin trading in oil related products on Sunday February 17th. Just what “oil related products” means is not yet clear because few details have been released to the public.
What we do know is that the bourse (oil exchange) will be dealing in strictly rail, the Iranian currency. The guess is right now that the bourse, which is to be located on the gulf island of Kish, will open by trading in “oil products” and within a short amount of time begin dealing in crude. This comes at a time when Iran’s oil output is reaching levels not seen in Iran since 1979.
The fear in the United States in some economic circles is that the opening of this bourse could lead to a further decline of the U.S. dollar. The U.S. dollar is currently the international currency in the trading of crude oil, with all oil exchanges being located in the Western world, but the Iranian oil bourse would seek to change this fact. As long as the U.S. dollar is the only international currency that can be used in purchasing oil the dollar will remain relatively stable because it will be in demand to purchase oil, if for no other reason. Therefore, countries such as Saudi Arabia are forced to accept the dollar for the sale of their crude and countries such as China and India are forced to keep the dollar on hand to purchase oil. Since the dollar has now fallen below the value of the Euro the opening of the Iranian Oil Bourse would remove one of the last remaining incentives for nations to hold onto the United States dollar. Some even go as far as to speculate this looming opening of the oil bourse being a reason for the harsh rhetoric Washington has used in the recent past towards Iran.
All of this however is only speculation at this point. Iran has repeatedly scheduled dates for the opening of an oil exchange only to push the opening back to a later date. The bourse’s success also hinges on whether or not other Persian Gulf nations as well as OPEC members sign on and become involved in the exchange.
Comment by Shaun on 14 February 2008:
I would be curious to hear if you feel like this is something to keep an eye on or if you think it is no big deal. Let me know in the comments below.
Comment by Tony Ryan on 14 February 2008:
Watch Pakistan and the border space between the Plateau of Iran and the Hindu Kush for US interests to emerge. This will put Iran in real perspective.
Comment by Gene on 15 February 2008:
If the media plays a blind eye to it, it’s indeed a big deal…
Comment by toby on 15 February 2008:
gene ignore the media.they focus on the nuclear issue.in fact this is just a cover story for stopping the bourse.
Comment by Bonny on 15 February 2008:
Tony, please elaborate on what could happen in the border space between the Plateau of Iran and the Hindu Kush. Why will what happens there put Iran in real perspective?
Sorry to be dense. But your comment somehow send chills up my spine. I’d like to understand this better.
Comment by evergreen2U on 15 February 2008:
I think this is perhaps a VERY big thing that has already influenced actions, and will influence more in the future…along with potential economic downturn.
Note what happened to Saddam after his 2000 claim he would change from dollars to Euros.
Also note the unprecedented cutting of 4-8 fiberoptic cables that primarily affected Iranian communications at the beginning of Feb. That was not anchor dragging in multiple places in the same time frame.
Comment by War Slayer on 17 February 2008:
Gene…my thoughts exactly.