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1st IEF-Shanghai Futures Exchange Industry Advisory Committee

29 May 2019

Shanghai, China

Dr Sun Xiansheng, Secretary General of the International Energy Forum (IEF) and Mr Jiang Yan, Chairman of the Shanghai Futures Exchange (SHFE) hosted the 1st IEF-SHFE Industry Advisory Committee on the Emerging Asian Energy Trading Market within the framework of the 16th Shanghai Derivatives Market Forum (SDMF) that took place on 27-29 May in the International Convention Centre Shanghai, China. Dialogue focused on the role of newly emerging price discovery mechanisms and risk management tools for evolving producer-consumer relations to strengthen secure, efficient, and sustainable energy trade and investment flows in Asia's growth economies.

The meeting was co-hosted by the IEF and SHFE together with the Shanghai International Energy Exchange (INE), the China Petroleum and Chemical Industry Federation (CPCIF) and sponsored by the Bank of Communications of China (BOCOM).  Mr Fu Xiangsheng,  Vice Chairman, CPCIF and Mr Xu Bin, President and Party Secretary, BOCOM Shanghai Branch, welcomed delegates and provided opening remarks alongside the hosts. Mr Fu Chengyu, former  Chairman, SINOPEC & CNOOC gave a key note speech as a special guest. Discussions were structured in three sessions that focused on:

  1. Key Developments in Oil and Gas Trade with Asian Growth Markets 
  2. Emerging Energy Trade Platforms and Risk Management Mechanisms to Enhance Producer Consumer Relations 
  3. Blueprint of Developing a Comprehensive Energy Derivatives Product Line

Energy market stability will continue to rely on building understanding and trust among producers and consumers that seek to foster new bonds in the Asian Pacific region. This ranges from new price formation and risk management tools, bolstering confidence in price discovery and reporting agencies, to an equitable distribution of burdens and benefits among stakeholders that maintain energy security and resilience through spare capacity, strategic stocks, commercial inventories and enhanced data transparency.

The Shanghai Futures Exchange, the Shanghai International Energy Exchange, and other newly emerging trade platforms stand at the centre of these new momentous developments in Asia. Around 60% of crude traded on the Shanghai International Energy Exchange is sourced from the Middle East which ships 75% of its total exports to Asia. New large importers increasingly influence price formation and will move pricing  East of Suez as more crude flows from the Middle East to China, India, and other growth economies in South West, and North East Asia.

Participants found that dialogue on the platform that the IEF provides in close collaboration with the Shanghai Futures Exchange will strengthen newly emerging  market signals from transparent and reliable functioning  trading hubs. This will offer market participants the opportunity to manage risks effectively while reducing transaction cost in the interest of secure, efficient, and sustainable energy markets in Asia and beyond.

Outcomes will help to inform the global energy dialogue including the 8th Asian Ministerial Energy Roundtable hosted by the United Arab Emirates on 9-10 September 2019 in Abu Dhabi with India as co-host, and the 17th International Energy Forum Ministerial hosted by China in 2020 with Morocco as co-host.

The full annotated agenda and presentations made available to download are listed below under key documents.

Key Links

Previous Joint IEF Industry Advisory Committee Meetings