The yuan-denominated crude oil futures trading in China hit this week their highest level since the contract was launched in 2018 as escalating threats to Middle East’s oil supply and increased purchases by Chinese refiners push prices higher.
Launched in March 2018, the INE crude oil futures contract (SC) is a physical-settlement contract priced and traded in Chinese yuan on the Shanghai International Energy Exchange.
The crude futures soared to as much as 929.4 yuan, or $138.50 per barrel, on the exchange, according to data compiled by Bloomberg.
The price spike followed the intensified concerns about supply from the Middle East after the East-West oil pipeline in Saudi Arabia was attacked by drones late last week, forcing the Kingdom to temporarily shut it down.
The international crude oil benchmarks also rallied at the start of this week. As of Tuesday, no timeline has been given as to when the pipeline would come back and continue helping Saudi Arabia bypass the Strait of Hormuz with shipments out of the Red Sea port of Yanbu.
Brent Crude prices hit $108 per barrel, and the U.S. benchmark, WTI Crude, jumped to above $103 a barrel, amid fears that the conflict would only escalate and dampen the tentative recovery of oil flows from the Strait of Hormuz and the Middle East as a whole seen in the past few weeks.
The Chinese futures are more closely tracking the benchmarks for crude grades of similar quality, such as Oman and Murban.
Both the Oman and Murban crudes were trading above $120 per barrel this week, with the November 2026 contract for Murban up by 0.69% at $128.64 early on Tuesday.
China’s yuan crude futures are also pushed higher by the rising buying of crude oil from Chinese refiners, who have started to gradually ramp up purchases in recent weeks.
By Michael Kern for Oilprice.com
