There is a need to improve systems to help manage trading portfolios, taking a global view of trade finance risks and opportunities. Savvas Manousos at Maersk has seen companies spend close to thirty years attempting to create the perfect system. “It tends to be very hard to do because the use of different types of derivatives, physical deal and bespoke structured finance. Systems tend to get outdated quite quickly. Usually, the only people who have got it right have often spent well in excess of a hundred millions dollars, and sometimes multiples of this, building in-house systems throwing an awful lot of resources at it. Not many people can afford to do that. But if you just limit yourself to shrink-wrapped packages, you tend to find yourself having to have lots of workarounds to be able to meet your business needs. We are still in an era of transaction, which is fairly archaic.”

He cautions, “There are some things that come across from FinTech that may trickle down. People have seen things work in other industries and think they can just apply it to the oil industry. And then when you actually try, there just ends up being lots of nuances and exceptions and again, it’s never quite as easy as most people think.”

More strategic partnerships are emerging between producer and refiners. Harry Tchilinguirian at BNP Paribas sets the scene:“Growth in oil demand in the future will come outside of the OECD, mostly from the large Asian economies that are China and India. Most Asian countries have little domestic production of crude oil, or production is maturing and declining. So we have seen long-term partnerships develop between countries like India that has a large refining base and leading oil producers like Saudi Arabia. These types of relations prove mutually beneficial, with security of supply for the Asian consumer and the monetisation of reserves and certainty of future cash flow for the middle eastern producer.

He notes: “Large state-owned companies like Saudi Aramco are looking beyond simply securing long-term supply contracts with consumers for their oil. They are deepening the integration of their supply chains. A case in point is Aramco’s acquisition of a 70 percent stake Saudi Basic Industries Corp, a petrochemical company. In addition, national oil companies in the Middle East have invested heavily in refining capacity of their own in recent years, increasing their oil product export capacity and developing or expanding their oil product trading desks”.