IRENEX Generates $1b in One Day

EghtesadOnline: More than 28 million barrels of gasoline were sold at the international ring of Iran Energy Exchange on Wednesday -- a record both in terms of value and volume.

News ID: ۷۵۱۳۳۲

26 October 2020

The gasoline was worth 230 trillion rials ($850 million) of the total 340 trillion rials ($1.2 billion) in total deals, the Securities and Exchange News Agency reported.

Wednesday’s trade brought the monthly value of IRENEX transactions to 387 trillion rials, a monthly record at the energy bourse.

As per the IRENEX rules, payments are made based on the forex rate quoted by the SANA system. The system operates under supervision of the Central Bank of Iran and records average exchange rates from across exchange bureaux. A US dollar is currently worth 282,000 rials in this system.

IRENEX has said it keeps the identity of buyers confidential, emphasizing that there are legal restrictions with regard to the identity of traders in the capital market.

There is few details about the identity of buyers and the target markets due to understandable concerns that disclosing the identities can expose them to risks emanating from the US economic sanctions.

In summer 2019, when the government started offering surplus gasoline on the bourse, IRENEX officials said neighboring states, where fuel prices are much higher, were the main buyers but announced plans to expand the market.

Selling oil and byproducts via the energy bourse gained traction two years ago, a few months after the US administration walked away from the historic nuclear deal in May 2018 and vowed to drive Iran's oil exports to zero.

Ever since, Tehran’s government has been doing all it can to counter the hostile US moves and continue exporting oil. One such measure is the diversification of oil sale methods like offering oil and oil products in the Tehran share market.

IRENEX has a mandate to offer crude oil since the autumn of 2018. Save for a few initial deals, the initiative has not helped.

State-owned National Iranian Oil Company offered crude oil at regular intervals in the last fiscal year (March 2019-20) but suspended trade as it could not find buyers.

Gasoline trade at IRENEX kicked off after it was officially announced that gasoline and oil gas production had surpassed domestic demand and the nation had reached self-sufficiency in producing the key fuels that have buyers overseas, particularly in the neighboring countries.

Generating revenue from gasoline export can be a new source of income for the government and help fix the ballooning budget deficit arising from steep decline in oil exports due to the US restrictions.

Earlier in the month, Mehdi Mirashrafi, head of the Islamic Republic of Iran Customs Administration, said gasoline was the country’s top export commodity in the first half of the current fiscal year (March 20-Sept. 21).