Every industry is slowly gravitating towards the benefits of blockchain technology, testing it out to see if it meets their needs. One of the latest endeavors involves big oil, which Reuters says is interested in utilizing blockchain technology in their own way. According to their report, the industry would use blockchain technology to support trading still, but with all financial products.

When trading oil, whether crude or refined, the process requires futures. The futures are necessary for hedging price fluctuations in the industry. By trading within petroleum firms, there is a chance of improving quarterly results and minimizing the potential for “hazardous events,” as Abacus Journal puts it.

According to the Reuters report,

“A consortium including energy companies BP and Royal Dutch Shell will develop a blockchain-based digital platform for energy commodities trading expected to start by end-2018, the group said on Monday. Other members of the consortium include Norwegian oil firm Statoil, trading houses Gunvor, Koch Supply & Trading, and Mercuria, and banks ABN Amro, ING and Societe Generale. Blockchain technology, which first emerged as the architecture underpinning cryptocurrency bitcoin, uses a shared database that updates itself in real-time and can process and settle transactions in minutes using computer algorithms, with no need for third-party verification.”

Abacus Journal lent some information that they recently learned, noting that

“several internal projects at a regional, privately-held petroleum firm that may include the integration of Bitcoin as a payment method at its retail/gas filling locations” are in the works. They added, “The project was in its infancy and ‘discussion only’ – but still illuminating that it was in the minds of those able to implement such an initiative.”

Between Abacus Journal and Reuters, it is clear that blockchain and cryptocurrency are on the rise. With the right nurturing and support, they can improve their own results, while driving speed and scalability that can reach the corporate level.

Energy trading and hedging are absolutely essential to the thriving petroleum industry. Any good firm adds experienced and focused traders to help them bring in millions to billions of futures trades every day, improving the firms’ reserves and the amount of product they have on hand. On its worst days, this process averts the natural disasters that come with the market, but on its best days, it acquires a trading profits that support the bottom line and pad the corporations’ reserve funds.

The petroleum industry is filled with traditional practices, though some of their protocols are archaic and outdated. Using blockchain could be the best way to bring the industry into the future of technology.

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