As the hype around blockchain subsides and actual applications come to light, the technology is beginning to change the face of a huge industry: crude oil and gas trading. This could be just the start of a lot more wide-scale adoption in oil and gas.
Earlier this month, Total and Chevron joined Shell, BP, Equinor, Mercuria, and Gunvor as shareholders of Vakt, a post-trade processing platform grounded in blockchain and aiming to eliminate the substantial fuss and paperwork around oil trades to reduce transaction times and costs. The platform’s owners claim it can drive efficiency and trade finance savings of as much as 30-40%.
Without context, these percentages don’t mean a whole lot. But when you know that the average trade finance transaction for a commodity cargo could involve as many as 36 different original documents plus 240 copies from 27 different parties, according to this overview of blockchain in commodity trading, it puts commodity trading—oil trading—in a different light that shines bright on blockchain.