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Iran grants license for euro-based oil bourse

Gulf Daily News (Bahrain)
TEHRAN: Iran’s oil ministry took a step toward establishing an oil trading market denominated in euros, rather than the US dollar, by granting a license for the bourse, state-run television reported yesterday.

Just who would trade on the market wasn’t immediately apparent.

Iranian television did not mention trading firms or governments willing to market or purchase products on the bourse, nor did it say when it would open for business.

“Iran has registered an oil bourse on the island of Kish in which oil would be sold in euros. The market will be the fifth oil market after New York, London, Singapore and Tokyo,” the broadcast said.

Oil trading on those markets is conducted in dollars.

Iranian legislators earlier this year urged the government to set up the market to reduce the US’ influence over the Islamic republic’s economy. They also criticised Oil Minister Sayed Kazem Vaziri Hamaneh, saying he had delayed setting up the bourse.

If the market succeeds, observers say euro-denominated oil sales could eventually convince central bankers to convert some US dollar reserves into euros, offering potential for a decline in the dollar’s value.

First floated in 2004 when president Mohammad Khatami was in power, the idea of a euros-traded oil bourse gained new life after the stridently nationalist Mahmoud Ahmadinejad was elected president last summer.
(6 May 2006)

Iran sees oil bourse in two months

Reuters via The Peninsula (Qatar)
BAKU: Iran plans to launch an oil bourse on the Gulf island of Kish within the next two months, Iranian President Mahmoud Ahmadinejad said yesterday.

“Our specialists are currently working on the plan and the bourse will start working within the next two months,” he told a regional conference in the Azeri capital of Baku.

Iranian officials have previously said the bourse would be a small pilot operation trading only two or three petrochemical products and it would start before March 2007, a delay from previous plans.
(6 May 2006)

The two crucial mistakes that cost Straw his job – Iran connection?

Ewen MacAskill, The Guardian
Jack Straw made two crucial mistakes in his dealings with Tony Blair: one involved the prime minister’s relationship with Gordon Brown and the other Iran. Mr Straw has said repeatedly that it is “inconceivable” that there will be a military strike on Iran and last month dismissed as “nuts” a report that George Bush was keeping on the table the option of using tactical nuclear weapons against Tehran’s nuclear plants.

But Mr Blair, who sees Iran as the world’s biggest threat, does not agree with his former foreign secretary. The prime minister argues that, at the very least, nothing should be ruled out in order to keep Iran guessing. Downing Street phoned the Foreign Office several times to suggest Mr Straw stop going on the BBC Today programme and ruling it out so categorically.

His fate was sealed when the White House called Mr Blair and asked why the foreign secretary kept saying these things. In any case, Mr Straw had boxed himself in on Iran to the extent that he would have had to resign if a military strike became a reality.
(6 May 2006)
Does Jack Straw’s recent demotion from UK foreign secretary indicate a higher probability of an attack on Iran? Related story from BBC. -BA

Why Iran Is Driving Oil Up

Christopher Dickey and Maziar Bahari, Newsweek
Tehran could calm jitters by toning down its nuclear rhetoric-if the regime didn’t need the money more
…Up and down Jomhuri Street [in Tehran], you see masses of Malaysian DVD players, Japanese sound systems, Chinese VCRs, a consumer paradise the likes of which Iranians haven’t come across for decades.

Of course, what you’re really looking at is oil money that’s been turned into the kinds of goods that keep people happy, or quiet, or both. While cutting back controls on imports, Tehran has jacked up salaries, pumped up pensions and doled out extra benefits from charities like the Imam Khomeini foundation. For Iran’s body politic, the cash infusion is like a drug. With the enormous surge in world petroleum prices, about $50 billion was injected into the country last year alone. And if the government’s spending has created a kind of public euphoria, it’s also creating an addiction. Some Iranian economists talk of a “disease.” What’s certain is that the regime’s pathological craving for continued high oil prices has become a key factor in the crises that President Mahmoud Ahmadinejad is helping to fuel, from the showdown at the United Nations over Iran’s nuclear program to the exploding cost of a gallon of gas. Many factors are to blame for high oil prices-but Iran’s increasing dependence on those revenues looms large among them.
(15-22 May 2006)