China’s commerce ministry granted a crude oil import license to Zhejiang Wuchan Zhongda Petroleum, a private trading firm based in the Zhoushan free trade zone in eastern China, the ministry said in a statement on its website on Monday.
Zhejiang Wuchan Zhongda, a venture between government fund Zhousan Communications Investment Group and Wuchang Zhongda Group, is the first privately owned trading company to receive a crude import license from the ministry.
The move could be an effort by the Chinese government to support the Shanghai crude futures contract that started up last year and attract institutional investors, according to Zhong Jian, chief analyst with consultancy JLC.
“The approval showed China is further opening up its crude market. More importantly, a trading firm can deliver crude oil to refineries against the Shanghai crude futures contracts,” Zhong said.
Zhejiang Wuchan Zhongda was set up in May 2018 with a registered capital of 1 billion yuan ($147.97 million), according to a filing from its parent company Wuchan Zhongda Group to the Shanghai Stock Exchange.