The oil industry has spent more than a century pushing into new frontiers. Its engineers pulled crude from beneath deserts, oceans and frozen tundra. Its traders built markets that turned oil into the world’s most actively traded commodity.
Now a small crypto startup is trying to persuade the industry to experiment with a different kind of frontier: putting a barrel of oil on a blockchain.
The company, Energy Substantiation, wants oil suppliers to help support a digital token tied to physical crude. For decades, ownership of real-world barrels has largely been the preserve of producers, traders and large institutions. Energy Substantiation is seeking to open up the market to anyone with a crypto wallet and a small outlay.
“It is remarkable to me that people can own dollars and people can own gold, but they’ve never been able to own oil,” JP Thieriot, who is spearheading the idea as Energy Substantiation’s co-founder, said in an interview.
His startup is borrowing from a familiar playbook. Stablecoins digitized claims on dollars, growing from a fringe experiment into a system that settles trillions of dollars a year. Energy Substantiation is betting something similar can be done with oil — a far messier asset than the currency behind stablecoins.
