Iran Energy Exchange will launch crude oil futures from next week as part of a plan to facilitate oil exports as US sanctions targeting its energy sector in November draw nearer.
According to an oil ministry deputy, oil futures will be launched
for the sole purpose of exports and one million barrels will be offered on the
stock exchange.
Ali Kardor, the chief executive officer of state oil company NIOC
told IRNA on Monday that the timing of starting the oil futures trade is being
determined.
"We are now setting the direction [for the futures trade]
that could be subject to revision in some cases," Kardor said. The
previously proposed method for oil payments to be settled 80% in foreign
currency and 20% in rials is also being reviewed, according to Financial Tribune.
Tehran has often tried to launch a crude futures several times in
the past to let the private sector participate in the state-dominated sector in
the past but to no avail. First Vice President Esh'haq Jahangiri said in early
summer that the government was embarking on new efforts to bring oil trade to
the stock market.
"Iran's crude oil will be offered at the bourse so that
private companies can buy and export it," Jahangiri said, adding that the
move was aimed at containing the mounting US animosity and its intention to
block Iran's oil export.
Securities and Exchange Organization Head Shapour Mohammadi had
said in July that the conditions are ready for offering crude oil on
IRENEX. The official expressed hope that trading crude on IRENEX will
occur soon through follow-up measures by the oil and economy ministries.
Mohammadi referred to the several-year delay to start offering
crude oil at IRENEX. “It seems that the grounds are now paved” for the new type
of crude oil sales.
In the past Iran had resorted to sanctions busters to sell its
oil, which went awry when some people failed to channel the oil export revenues
to the state coffers.
IRENEX has been upbeat on reports that it is about to host crude
futures and share prices in that market have quadrupled in a short time,
according to Donaye Bourse website. According to its analysis, such reactions
by investors are rather premature and overly optimistic because with current
trends in global oil prices and limits on Iranian exports, not much profit can
be made by traders from the launch of a crude futures.
Pundits opposed to the plan also say that private traders' foray
into the oil market would reduce the government's share and hurt
prices.
The US is getting ready to impose oil sanctions in early
November. The restrictions were suspended under the deal that the United
States and other five world powers in 2015. But after President Trump
announced in May that he was abandoning the historic agreement, US officials
went about pressuring countries to stop buying Iranian oil to prevent it from
its main source of income. They have also threatened secondary penalties if the
sanctions are defied.
Brent crude prices rose to their highest since November 2014 on
Monday ahead of the US sanctions against Iran, the third-largest producer in
the Organization of the Petroleum Exporting Countries.
Benchmark Brent crude oil futures rose to as much as $83.27 a
barrel and were at $83.21 at 0339 GMT, up 48 cents, or 0.6 % from their last
close.