Mercuria Chief: Blockchain Could Cut Oil Market Costs By 30%

The chief executive of Mercuria, one of the world’s largest commodities traders, is bullish on blockchain.

AccessTimeIconOct 14, 2016 at 6:48 p.m. UTC
Updated Sep 11, 2021 at 12:33 p.m. UTC

The chief executive of Mercuria, one of the world’s largest commodities traders, is bullish on blockchain.

The head of the Swiss-based firm appeared earlier this week during an event hosted by Thomson Reuters. In remarks, Mercuria chief executive officer Marco Dunand revealed that he had been engaging with stakeholders on the technology and that, in his belief, it could have a major impact on how commodities are traded and exchanged.

According to Reuters, Dunand told attendees:

"I've seen sufficient bank presentations to believe the technology is there and it's solid. And I believe we’re going to see a digital transformation of the oil and gas industry.”

Dunand’s comments are the first from the oil trading giant, which earned as much as $300m in oil trading profits during 2015, according to Bloomberg.

During the event, Dunand speculated that blockchain-based payments could help significantly cut costs.

"[Brent, Forties, Oseberg, Ekofisk] for instance is a market that has a limited amount of participants, that requires a reasonably solid balance sheet. You could see this type of market going to blockchain payments within the next 12 months," Dunand said. "We think this could reduce costs, certainly on payments, by 30 percent."

At the same time, adoption won't happen quickly unless more firms come together to collaborate on the development of any future blockchain networks tied to the oil market.

"We could adapt it fast, but you need a certain amount of participants in the industry to get it going," he told attendees.

Commodities exchanges worldwide have already begun looking at how they can apply blockchain to their own operations. Organizations like the CME Group and Dubai Multi Commodities Centre, for example, have spent much of the past year testing the technology in a bid to cut costs and improve how their markets work.

Image via FT/YouTube


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.