Euro-denominated reference oil contracts under global energy markets uncertainty

Abstract

Since the global petroleum market’s emergence in the 1950s the price of crude oil has always been fixed in US Dollars. For decades such practice has remained a constant of the global economy. However, over recent years signs have emerged that many market participants are not just bored with that but are ready to take eff orts to change the status quo. In 2018, China broke the ice by launching a yuan-denominated Shanghai crude oil futures contract. Then, it turned out that the European Union is ready to follow suit: the European Commission put forward an initiative in December 2018 that could result in an emergence of a ‘euro denominated reference oil contract’. What is the gist of the Brussels’ initiative and whom do these fresh EU proposals target?