Source: Moj News
The Iran Mercantile Exchange, a Tehran-based commodities bourse, will start trading fuel-oil contracts this month as a prelude to other energy trading, officials said.
The exchange will start trading 380-centistoke fuel oil in “cash and spot contracts” this month, Ahmad Rezaei, director for derivatives trading at the exchange, said in a phone interview with Bloomberg. Each contract will be for 10 metric tons, Rezaei said.
Iran, the second-largest crude producer in the Organization of Petroleum Exporting Countries (OPEC), seeks to revive its mostly government-controlled economy and expand its influence in energy markets in the Middle East, where two exchanges in Dubai already compete for customers by offering futures contracts in oil, gold and steel.
“Iran, as other countries, needs to rely on the free market to be competitive,” said Rezaei, who’s also the adviser to the exchange’s director general. “We want to put in place a system toward the modernization of the exchange and the trade of strategic items. Our exchange has these capabilities.”
An opening ceremony is scheduled for April 3 and trading will start later in the month, Rezaei said. A specific date for the start of operations has yet to be set.
“Delivery will be monthly and on a first come, first served basis” in locations in the Persian Gulf such as Bandar Abbas, Bandar Mahshahr or the Lavan island, Rezaei said.
Iran is also looking to trade “other energy products,” Rezaei said. “We will do it one by one and based on the country’s interests.”
Rezaei said he expected demand to mostly come from Asia nations such as China and India.
Iran produces some 20,000 tons of fuel oil a day, half of which is exported to destinations such as Europe, the United Arab Emirates, Singapore, China and India, according to Rezaei.
Iran Mercantile Exchange is a joint stocks company with about 30 percent owned by individuals and the rest by brokerages companies, producers as well as financial institutions, including Melli Bank, Mellat Bank, and Bank Keshavarzi (Agricultural Bank), Rezaei said.
Fuel oil trading at the IME will take place in parallel in Tehran and the island of Kish, a free trade zone, in the Persian Gulf, according to Rezaei. Trading will be from 11 a.m. to 4 p.m. local time.
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