China will launch crude oil futures on the Shanghai International Energy Exchange on March 26, Xinhua News Agency reported Feb. 26, citing the China Securities Regulatory Commission.

The crude futures contract will allow China to develop its own oil-pricing benchmark in addition to the existing global benchmarks for crude oil such as Brent and West Texas Intermediate, which are priced in U.S. dollars.

In the absence of a crude benchmark in the region, Asian countries pay more than Europe and the U.S. for imported oil. China pays an additional $2 billion a year, Xinhua said.

The new move will boost the yuan's global use through increased trade of yuan-denominated oil, said Xinhua.

Bai Ming, a researcher with China's Ministry of Commerce, said challenging the dominance of the two main benchmarks and the prominence of the U.S. dollar in global financial transactions may not necessarily happen.

Importers who buy yuan-denominated oil contracts may not drop out of the European and U.S. markets, since they will prefer to keep multiple options to serve businesses in different regions, the report said.