Believe it or not, today physical oil trade contracts use paper contracts. Not actually physical paper, but pdf versions. Blockchain post trade startup VAKT ran an analysis and found this manual process results in errors in 15% of contracts. Using smart contracts, it has launched an electronic trade confirmation solution, and Gunvor and TotalEnergies are the first to execute live transactions.
VAKT is backed by numerous oil majors, including BP, Chevron, Saudi Aramco, Shell, and Total, as well as traders and a handful of banks.
Stepping back, the norm in oil trading and many other commodities is for traders to sign General Terms and Conditions. And then a pdf contract for each deal. This is where the errors creep in.
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