The New Chinese Oil Benchmark: Implications for the Middle East

China introduced a new oil benchmark in March 2018, part of a bid to establish its position as an economic superpower. This article analyzes the impact of this new index on the Middle East, a key region where much of the oil on which the index is based originates, by focusing on market transparency, market determination, government involvement, physical accessibility, and the internal Chinese dialogue. The article then discusses the political, financial, and economic view from the Middle Eastern perspective. It finds that China still has a long way to go before it can turn the new oil benchmark into an international standard. In addition, the Shanghai Stock Exchange was launched just before the escalation of the trade dispute between the world's two largest economies, the United States and China. While this fight could hurt the traditional indices and elevate China's new oil benchmark, the coronavirus, which has spread worldwide from China, is another factor that may affect the quality and impact of this new index.