Blockchain and Energy Commodity Markets: Legal Issues and Impact on Sustainability

Journal of World Energy Law and Business

37 Pages Posted: 20 Dec 2021 Last revised: 28 Aug 2022

See all articles by Joseph Lee

Joseph Lee

School of Law, University of Manchester

Vere Marie Khan

affiliation not provided to SSRN

Date Written: December 19, 2021

Abstract

In this article, we explore the application of blockchain, a type of distributed ledger technology (DLT), in the field of energy trading. Specifically, we focus on crude oil trade. We argue that the application of blockchain technology and supplementary smart contracts supports responsible sourcing in complex supply chains and helps reduce information asymmetry in both the physical trade and paper trade of energy commodities markets. In order to apply blockchain technology to the energy market, we begin with a discussion on the architecture of blockchain and the different types of blockchain that might be applied in this sector. Further to this, we examine the current oil trading markets, particularly their relevant components, as part of the discussion on blockchain application. Subsequently, we look at how the various types of blockchain may be applied to the markets and examine their advantages and disadvantages. In conclusion, we look at the legal issues that may arise from such application, the potential solutions, and the potential impact of blockchain technology on the United Nations Sustainable Developmental Goals in the future and how a green fintech application can be developed.

Keywords: Blockchain, oil trade, energy market, smart contract, sustainability, green fintech, UN sustainable development goals (SDGs), geopolitical conflicts, sanctions

JEL Classification: K22, K12, K23, K32

Suggested Citation

Lee, Joseph and Khan, Vere Marie, Blockchain and Energy Commodity Markets: Legal Issues and Impact on Sustainability (December 19, 2021). Journal of World Energy Law and Business , Available at SSRN: https://ssrn.com/abstract=3989032 or http://dx.doi.org/10.2139/ssrn.3989032

Joseph Lee (Contact Author)

School of Law, University of Manchester ( email )

Oxford Road
Manchester M13 9PL, M139PL
United Kingdom

Vere Marie Khan

affiliation not provided to SSRN

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