← Back to Blog · 2026-10-05 · 7 min read · Product Education

You've watched WTI and Brent for years. You know how they move around OPEC headlines, EIA inventory days, and Middle East risk premiums. But here's the part most Western traders never look at: the world's largest crude oil importer runs its own crude futures contract, denominated in its own currency, on its own exchange — and it's fully open to foreign traders.

That contract is the SC crude oil future on the Shanghai International Energy Exchange (INE). If you trade energy, ignoring it means ignoring a real price signal from the demand side of the market. This guide walks you through what SC actually is, how the contract works, and where beginners typically trip up.

What Is the INE SC Contract, Exactly?

INE is a subsidiary of the Shanghai Futures Exchange, launched specifically to internationalize Chinese commodity pricing. SC was its flagship product — China's first futures contract open directly to overseas traders. Unlike WTI (CME) or Brent (ICE), SC is denominated in Chinese yuan (RMB) and settles with physical delivery of crude in bonded storage in China.

Here are the core specs you need before touching it:

Two things stand out for anyone coming from CME or ICE. First, the margin: SC has historically carried much higher exchange minimums than WTI or Brent — think double-digit percentages, not single digits. Leverage is real but meaningfully lower than what you may be used to. Second, the tick value: at 100 RMB per tick, one contract moves about US$14 for every 0.1 yuan change in price. Size your positions accordingly.

Why SC Trades Differently from WTI and Brent

This is where it gets interesting. SC is not a carbon copy of Brent with a different flag on it. It has its own drivers, and understanding them is the difference between trading it well and just betting on beta.

1. It prices medium sour crude, not light sweet

WTI and Brent are light, sweet grades. SC's deliverable basket is built around medium sour crude — grades like Oman, Dubai, and Basrah Light, plus domestic Chinese supply. That means SC's fair value is anchored to the Dubai/Oman complex, not to Brent directly. Traders watch the Brent–Dubai spread (often called EFS, the exchange for swaps spread) as a key relative-value input. When the EFS widens or narrows, SC's implied value shifts even if Brent barely moves.

2. It's a demand-side barometer

Brent and WTI are heavily influenced by Atlantic Basin supply — US shale, North Sea, OPEC spare capacity headlines. SC reflects Chinese and broader Asian demand: refinery run rates, import quotas for independent "teapot" refiners, and domestic economic data. When China announces stimulus or when teapot refinery quotas expand, SC can decouple from Brent. When Chinese demand data disappoints, SC can underperform. That decoupling is a tradable feature, not a bug.

3. The currency layer

SC trades in RMB. Even if the underlying crude market is flat, yuan depreciation mechanically pushes up the RMB price of oil, and appreciation pushes it down. Serious SC traders keep one eye on USD/CNY. If you're an FX-agnostic oil trader, this is a new variable to respect.

4. It's part of a much larger Chinese futures ecosystem

SC sits alongside some of the most liquid — and most volatile — Chinese commodity futures in the world. The 2021 thermal coal rally, where Chinese coal futures roughly tripled in a matter of months before government intervention slammed prices back down, is a widely known example of how fast Chinese commodity futures can move and how policy risk works there. That same policy sensitivity applies to SC: Beijing cares deeply about energy input costs, and regulatory or reserve-release announcements can move the market faster than any inventory report.

Trading Hours: The Rhythm You Have to Learn

Chinese futures sessions are structured differently from Western markets, and this trips up almost every newcomer.

• Day session: 9:00–11:30 and 13:30–15:00 China Standard Time (CST)
• Night session: 21:00–02:30 CST for crude oil, running into the next calendar day

The night session is the good news: it overlaps with the heart of the US trading day and with the most liquid hours in Brent and WTI. Crude-specific news that breaks during European and American hours gets priced into SC in real time.

The catch is the gap between 02:30 CST and 09:00 CST. During those hours — which include the tail end of the US session and the early European morning — SC simply isn't trading. If crude moves sharply in that window, SC opens the day session with a gap. If you hold overnight positions through the day-session open without accounting for this, you're taking gap risk that WTI and Brent traders never face. Many traders either flatten before the day open or explicitly size for it.

Also note: the Chinese market closes for a lunch break. If you're used to continuous sessions, the 90-minute midday halt takes adjustment — liquidity and volatility cluster around the opens, not through the middle of the day.

Costs, Margin, and Risk Controls

Let's talk practical economics.

• Margin: Expect the exchange minimum to be a double-digit percentage of notional, with your broker adding a buffer. On a 1,000-barrel contract, even a modest RMB price means tens of thousands of US dollars of notional value. Plan capital accordingly — this is not a micro-lot product.
• Price limits: Daily limits in the rough 4–8% range (the exchange adjusts them when volatility spikes). On a 1,000-barrel contract, a limit move is a five-figure dollar swing. Lock-limit days — where price pins and liquidity evaporates — happen in Chinese commodity futures, as the thermal coal episode demonstrated. Never assume you can always exit at your stop.
• Fees: Chinese exchanges charge per-lot transaction fees rather than per-contract spreads in the Western sense, and some products apply higher fees or margin hikes to discourage excessive day trading. Check the current fee schedule before you build a high-frequency strategy around SC.
• Position limits: Speculative position limits exist by contract month. They're generous relative to retail size, but know the rules if you're scaling up.

Rule of thumb: treat SC like a contract with real delivery mechanics and real policy risk, not like a CFD on Brent. The traders who get hurt in Chinese commodity futures are almost always the ones who imported their WTI assumptions wholesale.

Delivery, Rollover, and the Contract Calendar

SC settles physically. In practice, almost all retail and speculative traders roll long before delivery — but the delivery mechanics still matter to you, because they anchor the price to reality. Deliverable grades are medium sour crudes priced on a delivered basis into bonded storage, and the arb between SC, Oman futures, and Brent keeps SC roughly honest against international benchmarks.

For your trading calendar, the key dates are:

• Last trading day: 15:00 on the trading day before the last trading day of the delivery month — earlier than you might expect, so mark it.
• Liquidity roll: Like most physical-delivery contracts, volume migrates to the next active month well before expiry. The front months with the deepest liquidity are typically the nearest few calendar months. Trade the liquid month, not the nearby one by default.

A practical note on rollover: because SC is tied to the Dubai complex, the spread between contract months carries its own signal about Asian crude supply tightness. Some traders trade the calendar spread itself as a play on Chinese demand.

A Practical Playbook for Your First SC Trades

If you're coming from WTI or Brent, here's how I'd approach getting started:

Start by watching, not trading

Pull up SC, Brent, and USD/CNY side by side for a few weeks. Note when SC decouples from Brent and what caused it — a quota announcement, a yuan move, a Chinese data release, a reserve release. You're building a mental map of SC's idiosyncratic drivers before risking capital.

Respect the session structure

Decide upfront which sessions you'll trade. If you can't be present for the day-session open, either flatten overnight or reduce size to gap-risk levels you can genuinely stomach. The 02:30–09:00 CST dead zone is where avoidable losses happen.

Size for the margin and the limits

One contract is a serious position. Calculate your worst-case single-day loss at the price limit, not at your stop, and make sure it's survivable. This is the discipline that separates traders who last in Chinese commodity futures from those who don't.

Use Brent/SC relationships as context, not crutches

The EFS and the SC–Brent spread give you context, but SC has genuine domestic drivers. Don't trade it purely as an arb unless you understand the grade differentials, freight, and financing costs behind the spread.

Extend the same rigor to the rest of the Chinese market

Once you're comfortable with SC, the same framework — session rhythm, margin discipline, policy awareness — applies across Chinese commodity futures, whether you want to trade rebar and iron ore on construction demand, copper on the energy transition, or palm oil on the oleochemical complex. The mechanics differ; the mindset doesn't.

Test Your System Before You Risk Real Capital

SC rewards preparation and punishes imported assumptions. The contract specs, the session gaps, the currency layer, the policy risk — all of it is learnable, but the cheapest place to learn it is on historical data, not on a live account.

That's exactly why we built XS Select. If you've developed a strategy for China futures — SC, iron ore, rebar, or anything else on the Chinese exchanges — you can test it against real historical Chinese market data in our futures evaluation, with programs starting from $29. Pass, and you trade funded capital. No hype, no promises of easy profits — just a straightforward way to find out whether your system actually holds up in the world's most dynamic commodity market before you put your own money on the line.

Crude oil is the world's most traded commodity. It's about time you saw it from the demand side.