World’s largest crude importer, China announced the launch of a new crude oil pricing benchmark Monday.
The benchmark designed to set an Asian pricing index will serve as a third global benchmark outside of the U.S. and Europe.
The new Shanghai International Energy Exchange has begun trading today after China surpassed the U.S as the world’s leading consumer of oil.
The yuan-dominated exchange could eventually serve as a new oil futures pricing benchmark apart from West Texas Intermediate in the U.S. and the Brent index that’s based out of oil produced from the North Sea in Europe.
China’s current level of daily oil imports is about 10 million barrels and is expected to grow by about 2.1 million barrels more within the next five years, much more than any other country, said Sushant Gupta, research director for Wood Mackenzie, a leading research firm.