Three prominent players in the oil industry—BP, Equinor, and Shell—have partnered with major banks and trading institutions. Together, they are developing a blockchain-based energy commodity trading platform called Vakt. This collaboration highlights how blockchain transforms energy trading by improving efficiency and transparency. S&P Global Platts, an independent news outlet covering commodities and energy markets, announced this partnership on Monday, November 12.

In addition to the oil companies, trading houses Koch Supply & Trading, Mercuria, and Gunvor, along with banks Societe Generale, ING, and ABN Amro, are also involved in Vakt. The platform was originally unveiled last November. It aims to help major firms shift from cumbersome paperwork to smart contracts. This change reduces the time spent on operations and makes trading more efficient.

Lyon Hardgrave, Vakt’s product development vice president, spoke at the S&P Global Platts Digital Commodities Summit in London on November 12. He said the blockchain-driven platform will launch in the North Sea oil market by the end of November. Hardgrave also shared plans for 2019: “We will look at ARA barges, waterborne markets, and US crude pipelines. By January, we expect the first licensees to join, alongside our shareholders.”

Vakt Cuts Costs, Expands Market Reach

In addition, Hardgrave stated that Vakt is currently “receiving requests” to explore U.S. gas and petrochemicals. He also added that once the blockchain-driven platform is fully functional, it “could cut up to 40 percent of costs in the post-trade resolution.”

This partnership appears to be approved by oil industry stakeholders. A poll conducted by S&P Global Platts during the summit shows strong support. The poll found that “a vast majority of participants expect blockchain applications to have reached mass retail market adoption by 2025.”

However, Vakt won’t be the first platform of its kind in the industry. Switzerland already has a similar platform. There, a major energy company, trading firms, and global banks joined forces. They launched a joint venture called komgo SA. This venture will “oversee a new blockchain-based platform for financing the trading of commodities.” Some participants in Vakt include ING, Mercuria, ABN Amro, Societe Generale, Shell, and Koch Supply & Trading.

In conclusion

Major oil firms Equinor, BP, and Shell are partnering with prominent banks and trading houses to launch Vakt, a blockchain-driven platform that will be used for energy commodity trading. This collaboration clearly shows how blockchain transforms energy trading by streamlining processes and reducing costs.

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