The Iranian Oil Bourse

Of the numerous commodity trading exchanges worldwide, the Iranian Oil Bourse or IOB is one of the newest. Having first opened in 2008, it was founded by numerous Iranian ministries, the Iranian Mercantile Exchange and various other domestic institutions. This platform is intended to cater to oil, gas, and petrochemical byproducts, obviously due to the fact that these are the region’s main exports. Although the volume in contracts trading is comparably smaller to that of other commodities exchanges, a distinct difference exists between this and other global marketplaces.

Presently, the three current oil markers are all based on the value of the dollar; that is, they are dollar denominated. These three are West Texas Intermediate crude, Brent crude, and Dubai crude. The Iranian bourse intends to use this fourth market as a basis for contracts valued in other currencies than the US dollar such as the euro, the Yen, or the Iranian Rial.

Although currently not fully operational, the potential for a fourth oil marker is immense within this region. Iran is known to possess some of the largest oil and natural gas reserves currently known. When fully operational, this bourse will trade in more than forty different oil products. Many larger conglomerates already have realised the opportunity here and it is said twenty different foreign firms are already active in the petrochemical industry on Kish Island, where this bourse is located. This newer bourse may be prudent to monitor, as oil based in other currencies could present interesting opportunities to both currency and commodity traders.

>> Read more about the other Commodity Trading Exchanges