Oil companies and trading firms will now be able to start finalizing crude oil deals on a live blockchain-based platform for the very first time, in a move that will surely change the market.
Trading firms have been piloting similar schemes over the pass couple of years as blockchain technology has the capabilities of slashing cost in an environment of razor-thin profit margins.
London-based post trade management platform Vakt Launched it’s blockchain-based processing tool to a consortium that includes oil majors BP and Royal Dutch Shell, Norway’s Equinor, global energy trading firms Mercuria Energy Group and Koch Supply and Trading, as well as Gunvor.
According to the press release, the platform plans to open up access to third parties during January of Next year. Also planned during the early 2019 year is the inclusion of US crude pipelines, and European refined products such as gasoline.
The reason behind such a large interest for this sector is due the belief that blockchain maybe able to cut down costs and increase profit margins by cutting out intermediaries. This sector is hoping it will also increase transparency and security, and solve trade and settlement inefficiencies.
Vakt successfully achieves this through digitizing and centralizing the large quantities of paper previously necessary by each party to contract.
“Vakt is the logistical arm… Once a deal is executed through our book of records, it gets pushed through Vakt. The next leg is the financing,” said Eren Zekioglu of Gunvor Group.
Blockchain continues to be used as an effective proven method for today’s technologically growing society. With Oil industries jumping on to the bandwagon, it’s going to interesting too see how effective it becomes for them, and what other industries decide to tackle blockchain for themselves.
The real questions we should be asking ourselves, is whether this piece of blockchain live up to its promises for the oil industy?
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