SHANGHAI—A year after China rolled out yuan-denominated oil futures to shake up the global crude market, trading in the new contracts is gaining ground on rivals in London and New York.

But despite a surge in volumes, market participants say most trading in the yuan-based contracts has been initiated by domestic, rather than foreign players. That suggests China still has a way to go before oil futures in Shanghai can become a truly international benchmark.

China is the world’s largest importer of crude oil. Last March it launched its own oil market to establish prices in its own currency and to better reflect domestic demand and supply conditions. Another goal was to reduce the country’s dependence on the dollar-based global oil trading system.

Daily trading volume of front-month crude oil futures on the Shanghai International Energy Exchange averaged around 248.5 million barrels of oil in January 2019. They made up roughly a fifth of global trading in similar contracts and were close to trading volumes in Brent front-month oil contracts in London, according to data from Wind Info., ICE Futures Europe and CME Group . .

More recently, the benchmark Shanghai contract’s trading volume has comprised around 14% of the global activity in similar futures, or about half that of Brent’s. The bulk of crude-oil trading still takes place in the U.S., where the benchmark is the West Texas Intermediate contract.