The geopolitics of crude oil futures contracts benchmarks: RMB-denominated oil futures and the shift towards autonomy

This article explores the geopolitical implications of China’s introduction of RMB-denominated oil futures contracts, framed through the lens of ‘power-as-autonomy’. It argues that this development marks a strategic shift in the global energy landscape, particularly within the highly dollarized oil market, where pricing and trade have historically been dominated by USD-denominated benchmarks - such as Brent and WTI. By seeking to create a parallel financial infrastructure, also manifested through these RMB-denominated oil futures contracts, China is pursuing a ‘de-dollarization’ strategy aimed at enhancing its autonomy from the United States (US). Through the examination of four key geopolitical outcomes of these RMB-denominated oil futures contracts - enhancing internationalization of the RMB, the reduction of the ‘Asian premium’ in crude oil markets, strengthened energy and financial security for China, and resistance to potential US-led sanctions - this article situates China’s efforts within the larger framework of geopolitical competition between the US and China, highlighting how this shift may reshape international trade relationships and challenges the dominance of dollarized markets.