Trade at the Iran Energy Exchange jumped in the ninth month of current fiscal year to December 22 compared to the same period last year.
Energy carriers and commodities worth 111.35 trillion rials ($274.2 million) were traded in the month, up 57% from the corresponding period last year.
IRENEX is a multi-commodity exchange where physical energy carriers (oil and gas), electricity and commodity-based securities are traded.
As per IRENEX data, spot market trade was bear 454,922 tons in the month worth 75.52 trillion rials ($186.1m). Beside the spot market, some 946,094 standard salaf contracts worth 34.36 trillion rials ($84.6 million) were logged in the derivative market.
Salaf bond is an Islamic contract similar to futures, with the difference being that the contract’s total price is paid in advance.
In the nascent derivative market futures worth 11.6 billion rials were reported.
Energy futures are derivative contracts with energy products as the underlying asset. Market participants buy and sell energy commodities through energy futures at a predetermined future price and date.
As for other products, 608.402 million kilowatt-hour electricity worth 448.1 billion rials were sold via the IRENEX.
Trade in IRENEX reached 1,480 trillion rials ($3.64 billion) last year that ended on March 20 -- 13% higher on the year before.
IRENEX is a market for trading energy futures and commodities, including oil, gas, electricity, petrochemicals and oil byproducts. It was launched in 2013 as the fourth exchange and operates under the auspices of the Securities and Exchange Organization of Iran.
In the Pipeline
IRENEX recently announced plans for setting up the largest regional natural gas market.
Iran has more than 33 trillion cubic meters of proven gas reserves, accounting for 16.6% of the world’s total…for this reason it would make economic sense to launch a competitive market for gas trade via the Iran Energy Exchange and draw on its potential to fund mega natural gas projects and gradually transform the country into a gas export hub, Ali Naqavi, the IRENEX chief, has said.
“Despite Iran’s significant reserves, we have no role in setting international gas prices. Moreover, the government has always dictated the price of gas which over the years has undermined the gas sector and its revenue stream.
It is for these reasons that natural gas must enter the energy exchange market. We want to set up the biggest gas market in the region,” he noted.
Naqavi said there are plans to expand financing instruments at the IRENEX. It is set to launch energy-backed certificates of deposits (CDs) -- a scheme billed by observers as a milestone in domestic energy trade.
Commodity CD is a security indicating ownership of the holder on a particular amount of a commodity supported by standard warehouse receipt issued by the warehouses certified by the Securities and Exchange Organization, the capital market regulator.
