The value of trade in the Iran Energy Exchange (IRENEX) touched 171 trillion rials ($ 1.17 billion) in the last fiscal (ended March 20) – up 126% compared to the year before, the IRENEX boss said.
Ali Hosseini ascribed the growth to the depth in the spot market and role of the derivatives market in financing energy projects, Fars News Agency reported.
The value of trades at the physical market totaled 120 trillion rials ($ 824.7 million) in the last fiscal. Hydrocarbons had the lion’s share of the total trade in the previous fiscal, accounting for 99% of the market value and a disproportionate value of trade was registered in the name of the electricity sector in the spot market.
The derivative market value stood at 5 trillion rials ($34.36 million) during the reviewed period.
Hosseini said in the previous fiscal IRENEX had hosted trade in 58 commodities, namely “heavy naphtha” produced in Isfahan Oil Refinery, “light naphtha” from Abadan Oil Refinery, “heavy naphtha distillate” from Amir Kabir Petrochemical Company, and “reformate” from Tabriz Oil Refining Company as the main commodities offered in the market.
Reformates are made by converting petroleum refinery naphtha distilled from crude oil to be used as blending stocks for high-octane gasoline.
To expand the market, over 40 first initial offerings were made on IRENEX in the previous fiscal, including National Iranian Oil Company (NIOC) light crude oil, Kermanshah Oil Refining Company MC160 hydrocarbon, Isfahan Oil Refinery heavy naphtha, Persian Gulf Star Oil Company LPG.
According to the NIOC website, after oil sale via IRENEX started, the company sold 1 million barrels plus of light crude. Offering crude oil on the stock market is part of efforts to involve the private sector and international companies in the oil industry which has long been under government control.
According to Hosseini, the Economy Ministry sold 30 trillion rials ($206.1 million) worth of standard parallel salaf contracts for light crude oil on the IRENEX derivatives market. IRENEX also hosted the sale of fuel oil for NIOC worth 11 trillion rials ($75.6 million) through salaf parallel contracts. The Mah Taab Group sold 650 billion rials ($4.46 million) worth standard parallel salaf contracts for electricity on the IRENEX derivatives market.
Standard parallel salaf is an Islamic contract similar to futures, with the difference being that the contract total value must be paid in advance.
Established in 2012, Iran Energy Exchange is a commodity exchange trading physical energy carriers (including oil, gas, electricity, etc.) and commodity-based securities in its physical, derivatives and subsidiary markets.
