Iran oil bourse next week

Oil Minister Kazem Vaziri Hamaneh said on Wednesday that the establishment of Oil Stock Exchange is in its final stage and the bourse will be launched in Iran in the next week.

He told reporters, upon arrival from Qatar where he attended the 10th General Assembly of International Energy Agency and consultations with OPEC member states, that registration of the Oil Stock Exchange is underway and the entity will operate after being approved by by Council of Stock Exchange.

He rejected a statement attributed to him saying that Oil Stock Exchange will bring to the ground the US economy and said, "I don't know who has speculated that I've not talked about US economy." Asked about conference on energy in Doha, he said that more than 60 countries and 30 oil companies and consultants took part in the conference.

Kamal Daneshyar, who heads the Majlis Energy Commission, told Iran’s Economic News Agency that the oil bourse will open on Kish Island, Iran’s main free trade zone in the Persian Gulf.

“The first phase will handle deals on oil derivatives,“ he said, adding that the Ministry of Economic Affairs and Finance and the Management and Planning Organization (MPO) have approved relevant rules to the effect.

What makes the Iranian Oil Bourse the subject of such interest by the American government? According to rumors, which first vaulted the issue into the spotlight, the financial exchange in the aforementioned bourse will trade for oil in euros instead of the U.S. dollar. The dollar has long been the dominant currency for international oil trade.

The debate over the ultimate financial impact of trading oil in euros rather than dollars is a complex one, but according to some experts such a move could lead to a huge drop in value for the American currency, potentially putting the U.S. economy in its greatest crisis since the depression era of the 1930s.

Wikipedia entry on Kish Island

Link to a great explanation of the dollar consequences of an Iranian Oil Bourse and the US move away from a gold standard