India's stock market regulator the Securities and Exchange Board of India (Sebi) on Wednesday approved the Bombay Stock Exchange (BSE) to launch an Oman oil futures contract, the BSE said in a statement.

The BSE Oman Crude Oil Futures Contract will be settled against the Dubai Mercantile Exchange (DME) Oman Crude Oil futures prices on the expiry day, it said.

This is the first Oman Crude Oil Futures contract India has allowed.

The BSE will launch the monthly future contract for Oman Oil from Friday, with settlement on the last working day of the next month, BSE's head of business Development Sameer Patil said.

India, the world's third-biggest oil consumer and importer, does not buy huge volumes of Oman oil but the grade is a benchmark for Middle East supplies sold to Asia. India oil refiners use Oman oil as one of the benchmarks for making spot purchases of sour grades via tenders.

On October 1, the BSE made a foray into commodity derivatives with the launch of gold and silver futures contracts.

The BSE on October 11 signed an agreement with DME for the growth and development of commodity derivatives markets for crude oil.

Going forward BSE may look at introducing a three-month contract for Oman oil futures and is even considering a Brent futures contract, Patil said.