This move is a real threat to interests of Iran and other OPEC producers, which started a couple of years ago and has now, emerged as a new crisis. As a former director of the International Petroleum Exchange (IPE), I and a number of colleagues communicated our concerns about fluctuations of the North Sea Brent benchmark price induced by commercial agents and investment banks and the resultant multibillion dollar losses to oil producers, including Iran, with the late Dr. Nourbakhsh, the then governor of Central Bank of Iran. We proposed that Iran should lead the way to establishment of a Middle East energy market, which will be capable of fixing a fair benchmark for the region. Proposals about establishing the market led to start of a project to form an energy market in late 2003. After a meeting in Tehran in May 2004, the “Whimple Consortium”, where I am a senior partner, undertaken the project in cooperation with Tehran Stock Exchange. “Whimple” conducted a preliminary study in August 2004 according to a request by Dr. Asemipour, advisor to the Iranian minister of petroleum and client of the project. Due to valuable encouragements of Dr. Asemipour, we adopted a simple, but radical approach to develop a new energy market in Middle East with three features: 1) The market will be controlled by all concerned groups and will be basically different from existing western markets that are controlled by brokers that only think about their own interests; 2) The market will evolve through a natural process and transactions will be carried out according to a central registry. It means that paper transactions will give way to electronic trade; 3) The market will use a cooperative trade plan according to which financial settlement systems will fully conform to the Islamic values. Ten months have lapsed since that time and it has been made clear that due to hefty profits for brokers, the oil market is entering a period of crisis of imbalance. Producer countries lead by Iran and Saudi Arabia are in a good position to thwart that threat through a swift move to establish a benchmark price for the Middle East. Otherwise, brokers that are currently swaying power in the market will influence Middle Easts benchmark to reap its economic benefits. This can be explained by citing simple figures: a seat at NYMEX (along with dealing rights) was recently sold at a record price of 2.4 million dollars. Two-thirds of 800 NYMEX seats are rented out each for 250,000 dollars a year. The hefty rents as well as subsequent profits are actually supplied by oil producers and consumers. This is a real threat. The oil market is very choppy. The question is when the tide ebbs; will Irans oil trade ship run aground or ride the high seas? Source: Donyay-e Eqtesad (The World of Economy); Saturday, July 30, 2005