The exchange is based on world oil exchanges. It has been planned for years but faced repeated delays, the Malaysia Sun reported.

Iranian Oil Minister Gholamhossein Nozari said oil trading would make Iran more competent as a supplier and ready to begin the supply of crude oil in the long term.

When plans were first announced, some analysts speculated Iran might use it to undermine the U.S. dollar by pricing crude in euros or other currencies.

Oil and petrochemical products will be traded in Iranian rials, as well as all other hard currencies, the statement quoted Nozari as saying.

Iran's central bank was seeking to diversify Iran's reserves away from the dollar because of U.S. sanctions on the Islamic republic.

The Iranian Oil Bourse will also use the euro. It will be located on the Persian Gulf Island of Kish, a location Iran claims to be a free-trade zone.

The idea first surfaced in 2005, but the election of Iranian President Mahmoud Ahmadinejad delayed the opening of the trading forum because the president and Parliament could not agree on the appointment of an oil minister.