Kalshi takes on CME with first-ever U.S. oil futures that never expire

Kalshi is seeking U.S. regulatory approval for an oil futures contract designed to remain active for 10 years before expiration, aiming to overhaul a traditional financial market model.

Although the proposed product is intended to track West Texas Intermediate crude oil, its primary innovation lies in its unique structure.

Participants would avoid the need to continuously roll over contracts to maintain their oil exposure. The Commodity Futures Trading Commission now faces a 45-day window to determine whether this novel approach belongs within regulated U.S. commodity markets.

Kalshi wants one oil trade to last almost forever

Conventional oil futures are tied to specific calendar months. As a contract nears its expiry date, any investor wanting to keep their position open must roll it over into the next month. This recurring process can drain funds through transaction fees, price spreads, and suboptimal execution timing.

In essence, Kalshi poses a fundamental question: Why repeat this process every few weeks or months?

The proposed contract would sustain a single position for a decade while utilizing a funding mechanism designed to anchor the price to the WTI market. For those maintaining crude exposure over extended durations, this could streamline mechanics entirely. Traders would eliminate the constant need for contract rollovers, along with the associated hazard of accidentally triggering a physical delivery obligation at Cushing, Oklahoma, where they had no intention of taking actual possession of the crude.

The firm also contends that a single, large-duration contract would centralize trading activity rather than fragmenting liquidity across a lengthy sequence of expiration dates.

This concept arrives at a particularly opportune juncture.

The Iran conflict has transformed crude into one of the most aggressively traded macro assets of the year. Hedge funds, institutional entities, and retail traders have all pursued energy price swings as geopolitical news continuously shifts valuations.

WTI futures have moved within roughly a $60-per-barrel range since January—precisely the sort of market environment that heightens trader focus on execution efficiency, rollover expenses, and the flexibility of their financial instruments.

Trading for the contract would occur 24 hours a day, Monday through Friday. While the agreement would not literally last indefinitely, a 10-year lifespan is long enough that typical market participants would likely see little practical difference in a standard trade.

A significant hurdle remains, however, as regulators cannot process this as a standard exchange listing.

Because perpetual derivatives require heightened scrutiny, Kalshi cannot utilize the self-certification process available to many exchanges for other instruments. The CFTC must independently evaluate the filing based on its own merits.

This submission arrives at a difficult moment for CME Group, which recently dropped its own bid to alter oil trading rules.

CME backed off, while Kalshi is pushing further

CME had previously developed an early iteration of a contract that would enable round-the-clock trading, 24 hours a day, seven days a week. That initiative encountered fierce resistance from both the oil industry and regulatory bodies.

The core concern extended beyond weekend trading hours; physical oil markets rely heavily on specific benchmarks, and it remained uncertain whether continuous trading could stay anchored to underlying market realities.

The CFTC initially blocked the initiative, sparking months of intense debate before CME ultimately abandoned it.

Kalshi is pursuing a different path. Its platform would pause operations over the weekend, yet the contract itself would virtually never expire.

A history of friction exists between the two entities as well. CME leaders have publicly criticized perpetual futures, and earlier this year, CME filed a lawsuit against the CFTC over its authorization allowing Kalshi to offer crypto-linked variants of a similar broad derivative framework.

Moreover, oil is far from the only regulatory battleground facing Kalshi.

Ohio, alongside 38 other states and Washington, D.C., has petitioned the U.S. Supreme Court to review a distinct legal dispute concerning Kalshi’s sports event contracts. In an October 7 filing, Ohio backed New Jersey in the case *Flaherty v. KalshiEX, LLC*, Case No. 26-299.

The controversy centers on whether these sports event agreements qualify as swaps under the Commodity Exchange Act and, if so, whether federal commodities legislation supersedes state gambling regulations.

Kalshi secured a victory in the Third Circuit, where the sports event contracts were classified as swaps under federal authority. Conversely, the Ninth Circuit ruled against the company, determining that Nevada’s gaming laws remained applicable. The Sixth Circuit similarly rejected the notion that federal commodities law preempts state-level gambling statutes.

Additional legal challenges of a similar nature remain unresolved across the Second, Fourth, Seventh, Eighth, and Tenth Circuits, as well as the Massachusetts Supreme Judicial Court.

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