A tanker company may hold one barrel of crude oil in an export terminal and then berthed at an importer’s refinery. If you want entirely automated trading services, you can visit websites where you will get all the advanced bitcoin trading features. From there, it may be split into diesel and gasoline products sold at the pump retailers. With so many points in the chain, how can we track them all?
A new technology called blockchain provides a solution for this. Instead of relying on intermediaries to authenticate transactions and ensure data integrity, blockchain relies on cryptography to ensure every party owns its own assets. Bitcoin’s first implementation was at the beginning of this century, which used the technology to create an alternative payment system free from government or banking control. However, it has recently gained acceptance in other areas, and there are more than 100 use cases for blockchain in the oil and gas industry alone. If you are planning to earn profits by trading Oil, you must first invest in a reliable trading platform like oil trader.
Blockchain could be used by an upstream company that wants to track its crude oil throughout the process from wellhead to delivery to a refinery export terminal, for example. It could also be used by shipping or bulk tanker companies that need to track the locations of their rigs and ships. Blockchain is also being explored by fuel distributors and trucking companies, creating a secure and reliable supply chain.
How vital is crude oil tracking in the oil supply chain?
A secure and reliable supply chain is vital for the oil and gas industry. Although in the past, we have relied on companies such as OPEC to ensure a steady supply of crude oil, this is no longer possible. Today, more than 40 countries are exporting crude oil, with many operating independently.
To make matters worse, political instability and violence lead to the closure of shipping routes, pipeline blockages, and other disruptions. Amid all this turmoil, tracking is one way to prevent or mitigate problems. In the supply chain, it is called phasing, a term that means to send deliveries sequentially from one point to another to maintain an even flow of goods throughout the supply chain.
Tracking crude oil is made difficult by the fact that it’s only sometimes delivered in one container. Crude oil may be exported in several containers, shipped separately, and received at different ports. If you want to know the country where your crude oil originated, you need to trace its origin and stop anywhere along its route for inspection. It can be a significant problem for importers and exporters because securing payment for each shipment of crude oil can take time and money.
Use of blockchain in crude oil tracking:
Using blockchain technology with crude oil tracking is a natural fit. Blockchain can easily track products during the shipping and logistics process, making it easy to determine where they came from. Using blockchain, an exporter can assign each shipment a unique identifier that importers can verify at any time. People could then track the product through the entire distribution network of cranes or ships to determine its origin and expected arrival date at its destination. Each transaction would be recorded and validated for all parties involved, creating trust in their trading relationships.
Using the technology would also ensure the smooth flow of goods down the supply chain because there no longer needs to be a phasing system. Instead, all parties in the supply chain would accept that the product is from the origin specified. It would also help fight fraud and theft, which have become significant problems in recent years. If a shipment is different from what it’s supposed to be, blockchain will ensure that everyone knows about it immediately.
Blockchain also allows tracking of products during the refining process or when they are sold at retail stations.
Blockchain can tokenize crude oil:
Today this type of tracking is often achieved by using paper documents that need to be linked to the information required for buyer verification. Blockchain can provide an end-to-end solution, which includes all the details required for tracking and validation from wellhead to refinery.
Tracking of each shipment:
Once the shipment arrives at the refinery, it has to be processed and finished as products for shipment. Tracking is also a problem here. For example, crude oil may have to be blended with other substances before it can be sent out to be used in products such as gasoline or diesel fuel. Even with a well-established logistics network, this process is quite complex because of all the various raw materials involved. Tracking each shipment through the supply chain is often complicated and time-consuming and could lead to gaps in supplies or lost shipments. Blockchain technology with crude oil tracking allows you to track each shipment as it moves through the refinery system and onto a tanker.
The ability to track crude oil during any stage of its life cycle:
Companies can use blockchain to track crude oil from the wellhead to a refinery or distribution point during processing and even when loaded into a shipping container. Blockchain technology will result in faster and more secure trades for everyone involved. In addition, the technology makes it possible to create a global supply chain that can accommodate insurers, banks, and other third parties without conflict or confusion. As a result, it could significantly lower costs for everyone participating in the process, including producers and consumers.