Commodity-market participants, including CME-related interests, are pressing U.S. regulators to reject Kalshi’s proposed perpetual crude oil futures contract, citing potential risks to market integrity and calling for tighter oversight of offshore trading platforms.
Commodity exchanges and other participants in the U.S. derivatives industry are pushing the Commodity Futures Trading Commission (CFTC) to reject Kalshi’s proposed perpetual oil futures contract, according to reports citing Bloomberg. The opposition centers on concerns that perpetual derivatives could undermine market integrity and create regulatory challenges for established commodity markets.
The proposal represents another step in Kalshi’s expansion beyond event-based prediction markets into derivatives linked to real-world assets. However, the resistance from established commodity-market participants could complicate the company’s efforts to introduce a new type of oil-trading product in the United States.
The contract remains subject to regulatory review, meaning it cannot be treated as an approved or launched product.
Why Commodity Exchanges Oppose Kalshi’s Oil Futures Proposal
The Commodity Markets Council, an industry organization representing commodity exchanges, traders and other market participants, has urged the CFTC to withhold approval of the proposed product, according to recent reporting by Finance Magnates and other outlets citing Bloomberg.
The council has raised concerns about the potential effects of perpetual oil futures on market integrity. It has also called for regulators to address the ability of U.S. retail traders to access offshore commodity-trading platforms, including through tools such as virtual private networks (VPNs).
The broader debate concerns how regulators should oversee derivatives that allow traders to maintain exposure to an asset without repeatedly moving between conventional futures contracts.
Traditional oil futures have defined expiration dates and are closely connected to established pricing and delivery arrangements. Perpetual-style contracts use a different structure, typically relying on periodic funding payments and a reference price to keep their market price aligned with an underlying benchmark.
Industry participants are concerned that these differences could create challenges for price formation, oversight and the relationship between financial derivatives and the physical oil market.
How Kalshi’s Proposed Perpetual Oil Futures Would Work
Kalshi has proposed a contract linked to West Texas Intermediate (WTI) crude oil, one of the major benchmarks used to price oil in the United States.
The proposed product, identified in reporting as WTIPERP, is designed to provide continuous oil-price exposure without requiring traders to roll positions into successive monthly futures contracts.
Unlike conventional futures, which expire on specified dates, perpetual futures are generally designed to remain open indefinitely. Kalshi’s proposed contract has been described as using a reference price based on nearby NYMEX WTI futures, with a funding mechanism intended to keep the contract price aligned with that benchmark.
The product is designed to trade during regular oil-market trading periods, rather than continuously over weekends. Its structure also seeks to avoid the physical delivery obligations associated with conventional crude oil futures.
Kalshi has argued that this approach could reduce the transaction costs and pricing risks associated with rolling expiring positions. It could also concentrate liquidity in a single instrument instead of spreading trading activity across multiple contract expirations.
However, those potential advantages do not resolve the regulatory concerns raised by opponents. The CFTC must assess the proposed structure and its implications before the product can proceed.
CFTC Faces Questions Over Market Integrity and Oversight
The dispute places the CFTC at the center of a wider discussion about how innovative derivatives should fit within the U.S. regulatory framework.
Perpetual futures became especially prominent in cryptocurrency markets, where traders use them to speculate on price movements without conventional expiration dates. Kalshi is seeking to extend a similar model to crude oil, bringing the structure into a market closely connected to physical commodities and benchmark pricing.
Oil markets play a different role from many digital-asset markets. Futures prices can inform commercial hedging, supply contracts and decisions involving the purchase or sale of physical crude. Regulators and market participants therefore have to consider whether a new derivative could affect the reliability of those pricing relationships.
The council’s reported opposition also extends beyond the design of Kalshi’s contract. Its call to address offshore trading access reflects a broader concern that restrictions on U.S.-regulated products may not prevent retail traders from seeking similar exposure on overseas platforms.
Any regulatory response would need to balance investor protection, fair competition and the availability of properly supervised trading products.
The Dispute Follows CME’s Pushback Against New Perpetual Contracts
The latest opposition comes amid an ongoing disagreement between CME Group and the CFTC over the regulatory treatment of perpetual futures.
CME previously challenged the CFTC’s decision to allow Kalshi to list a cryptocurrency-linked perpetual futures contract, arguing that the products should be treated as swaps rather than futures under the applicable derivatives framework.
That dispute illustrates the competing views within the industry. Established exchanges have raised questions about regulatory classification and the rules governing perpetual products, while supporters of expanded access argue that innovation and competition should remain possible within regulated markets.
The oil proposal adds another dimension to the debate because crude oil has direct connections to physical supply, delivery arrangements and commercial hedging. A product that works in one asset class may raise different questions when applied to another.
CME and other established market participants could therefore have a significant role in shaping the regulatory discussion, although the CFTC—not industry objections alone—will determine the proposal’s regulatory outcome.
What Approval or Rejection Could Mean for Oil Traders
If approved, Kalshi’s proposed contract could give traders another way to gain exposure to WTI crude oil prices without repeatedly rolling monthly positions. Its design could appeal to participants seeking longer-duration exposure through a single instrument.
However, approval would not automatically establish that the contract is suitable for every investor or that it would provide better pricing than conventional futures. Trading costs, funding payments, liquidity, price differences from the benchmark and the risks associated with leveraged derivatives would remain important considerations.
A rejection or request for significant changes could slow the introduction of perpetual oil derivatives on regulated U.S. platforms. It could also reinforce the need for clearer standards governing products that combine features of traditional futures and perpetual contracts.
For the broader derivatives industry, the outcome could help clarify how regulators evaluate new instruments linked to commodities with established physical-market benchmarks.
What Happens Next?
Kalshi’s proposal is subject to CFTC review. The regulator will need to consider the contract’s design and the issues raised by market participants before determining whether it can be offered under the proposed framework.
The industry opposition does not, by itself, mean the contract will be rejected. Likewise, the submission of a proposal does not mean that regulatory approval has been granted.
Traders and market observers will be watching for further developments from the CFTC, Kalshi and industry organizations as the review progresses.
Bottom Line
Commodity-market participants are urging the CFTC to reject Kalshi’s proposed perpetual WTI oil futures contract over concerns about market integrity and regulatory oversight. The proposal could offer traders an alternative to rolling conventional oil futures, but it has intensified debate over how perpetual derivatives should operate in U.S. commodity markets.
The next key development will be the CFTC’s regulatory decision. Until then, Kalshi’s proposed perpetual oil contract remains pending, and its launch is not guaranteed.
Disclaimer: This article is for informational purposes only and does not constitute investment or trading advice. Futures and leveraged derivatives involve substantial risk and may not be suitable for all investors.
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