Blockchain technology is expected to facilitate the process of bills of lading for oil traders, something that has the potential to decrease the time needed for contracts to be settled.
A number of oil companies, traders, and banks want to start using blockchain technology for bills of lading, the documents that verify cargo ownership in commodity trading. This development can result in less paperwork, costs, and errors.
Namely, a consortium consisted by Mercuria Energy, Gunvor Group and Koch Supply & Trading, BP, Royal Dutch Shell, and Statoil ASA, Societe Generale, ING Groep, and ABM Amro, is currently testing a blockchain platform for such use.
According to sources, the results of these tests included a tanker of oil being sold three times before its arrival at the final destination. Moreover, transactions were verified within 25 minutes, instead of three hours, which is the normal in these days.
A reason for these delays in verifying the transactions is, partly, the human element. People working in offices can spend a lot of time checking the necessary documents for a contract, thus increasing the risk of human error as well. Blockchain wants to eliminate this problem, but as a result some jobs will be lost.
Speaking about this Anthony van Vliet, trade commodity finance chief at ING Groep, said that those working in logistics, finance, accounting and operations, will be affected the most by blockchain technology.
