CHINA plans to launch its long-awaited crude oil futures contract March 26, the country’s securities regulator said Friday, a move that could potentially shake up pricing of the world’s largest commodity market.

Chang Depeng, a spokesman for the China Securities Regulatory Commission (CSRC), gave the launch date at a regular briefing in Beijing, confirming what two sources familiar with the situation said earlier Friday.

It will potentially give the Shanghai International Energy Exchange (INE), which will operate the new contract, a share of the trillions of dollars each year in oil futures trading.

The Shanghai Futures Exchange (ShFE) and INE, which is part of the ShFE, declined to comment.

Asia has become the world’s biggest oil consuming region, and China hopes its own derivative crude contract will better reflect market conditions in the region.

The two most active oil futures contracts in the world are the West Texas Intermediate (WTI) contract offered by the New York Mercantile Exchange, owned by CME Group, and the Brent contract offered by the Intercontinental Exchange from London.

WTI futures are an important component of physical oil prices in the Americas, while Brent plays a vital role for prices for Middle Eastern, European and Asian crude.

Most physical oil trades globally are hedged using those two crude derivatives.

While some details of the Chinese crude oil contract such as the size (1,000 barrels per lot) and grades have been released, other information like the delivery depots for the crude are yet to be announced.

“This is a first small step toward China becoming a more active price setter in oil, but for Shanghai to come anything close to a global benchmark, it will take years,” said Michal Meidan, an analyst at industry consultant Energy Aspects Ltd. “While this gives another impetus to liberalize the yuan, there are bigger obstacles related to volatility and capital outflows that will dictate the pace.”

The creation of the yuan-denominated contract, which will be open to Chinese and overseas investors, was originally expected about six years ago, but has run into delays amid turmoil in China’s stock markets and other commodity futures.

China surpassed the United States as the world’s biggest oil importer last year, buying about 8.43 million barrels a day to feed demand from its refiners.

(SD-Agencies)