When Eng. George Reynolds threw out his hat for joy at the wee hours of May 26, 1908, when he explored oil – the most strategic product in the 20th century – after seven years of an exceptionally arduous task in Iranian deserts, he could barely imagine that the black gold would foster major and remarkable developments in Iran’s political, economic, and industrial sectors in the next 100 years.

Iran has had an odyssey starting with the formation of Anglo-Persian Oil Company and setup the world’s biggest refinery in Abadan in 1912 and extending to the emergence of installations in Assalouyeh – the country’s economic capital.

On its long way, Iran has experienced great developments in domestic and international arenas that caused it to move into a new era in the history of oil industry.

After the nationalization of Iran’s oil industry and coup of Aug. 19, 1953, economy, politics, and oil put their inseparable bond on display, showing the people that oil is not only a source of revenue, but a very influential factor in the land’s politics and culture.

On the other hand, oil companies gradually lost the control of market and the producers took the helm as Iran, Iraq, Saudi Arabia, Venezuela, and Kuwait set up the Organization of Petroleum Exporting Countries (OPEC) in Sept. 1960.

In the 1970s, OPEC turned to one of the main bodies that set the oil prices and control its market.

The road, however, faced oil shocks and price fluctuations, introducing a new shape in every era. The last came in late 2003, when a sharp rise in the price of black gold was registered and now the 70 dollar price for a barrel of oil is not something odd to the world.

 

First Step: Transparency in Oil Industry

 

Iran’s oil industry is wrestling with tens of bureaucratic routines and hundreds of managers and staff face red tape to put a deal into action.

Since the oil bourse defines everything in the framework of supply and demand, all markets factors have equal conditions, causing further transparency in the purchase and sales processes of oil products.

In addition to transparency, the oil bourse paves the way for fully overseeing all activities of the industry. When different oil and petrochemical companies offer their products in the bourse and the purchasers buy the products presented in the bourse, all oil transactions are carried out in the presence market supervisors, media, and people.

 

Second Step: Arrangement for Oil Industry Privatization

 

Furthermore, the oil bourse has the capacity to take a major stride toward the privatization of a main part of the state body. By running the oil bourse, the purchasers of oil products will grow in number and various companies have the chance to move into the oil trade market.

Therefore, the oil bourse is able to break the government’s monopoly of oil deals and the state-run’s monopoly of supply and demand. In that case, Iranian investors have the opportunity to make debut in the oil market.

 

Third Step: Closer Competition in Intl. Oil Trade

 

Given the cutthroat competition in oil, gas, and petrochemical supply, Iranian companies will be forced to improve their production processes and management system and cut unnecessary costs to compete with their counterparts in an open rivalry if the oil bourse steps in.

The development also causes other sectors to make progress, making the country ready for entering the world trade market.

The oil bourse exposes the weak points of banking, insurance, customs, financial, and administrative systems of the country, forcing them to remove the problems. It also causes the government and oil industry to pay more attention to transportation, national might in the energy sector, and oil equipment market.

No doubt, Iran’s international oil bourse has the potential to create a host of economic opportunities and to prepare the ground for development of the infrastructure of the country’s most important sector, i.e. oil industry.

News Code 104452

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