Crypto startup tries to pour a barrel of oil on the blockchain

July 9, 2026 12:19 pm, EDT

The oil industry has spent more than a century pushing new boundaries. Its engineers extracted crude oil from beneath deserts, oceans and frozen tundra. Its traders created markets that made oil the world’s most actively traded commodity.

Now a small crypto startup is trying to convince the industry to experiment with a different kind of limit: pouring a barrel of oil on the blockchain.

The company, Energy Substantiation, wants oil suppliers to help support a digital token tied to physical crude oil.

For decades, real-world barrels have been largely owned by producers, traders, and large institutions. Energy Substantiation is trying to open the market to anyone with a crypto wallet and small outlay.

“It’s 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 co-founder of Energy Substantiation, said in an interview.

His startup is borrowing from a familiar playbook. Stablecoins have digitized claims on the dollar, growing from a marginal experiment to a system that settles trillions of dollars per year. Energy Confirmation is betting that something similar can be done with oil – a far dirtier asset than the currency behind stable coins.

Its WTIC token is designed to represent one barrel of West Texas Intermediate crude. Unlike oil ETFs or crypto perpetuals, the product is being offered as tokens backed by physical oil rather than futures or other derivative contracts. Investors can also trade it 24 hours a day. Today, benchmark WTI and Brent crude futures are traded primarily through CME Group Inc. and Intercontinental Exchange Inc. While the markets are closed on weekends. This has become a growing source of frustration for investors as developments in the Iran conflict occur before trading can resume, leading to recent interest in products that rely on crypto’s always-on infrastructure to facilitate 24/7 oil trading.

But even if speculators are ready for it, selling oil-backed tokens could be difficult for an industry based on physical assets. Thieriot recalls an early investor meeting where the idea was dismissed as an uneasy mix of Texas business culture and crypto: “Bubba meets Bitcoin – this will never work.”

For now, the vision is bigger than the market. The on-chain value of WTIC is currently around $80,000, although the token is expected to debut on LMAX and receive an additional $1 million in liquidity in the future. Thieriot said the startup is working with about a dozen commodity firms and oil suppliers, including a major trading house, and is in talks with other exchanges and market makers.

how it works

WTIC is designed to track the price of West Texas Intermediate crude. Suppliers put oil into the system through a reverse Dutch auction, which involves offering barrels at a discount to the day’s market price. The company says the tradeoff allows producers to fill pipeline lines and monetize operating inventory, including tank bottoms, that would otherwise generate little revenue. Investors can then buy and sell tokens on the blockchain network, while new tokens are created through a daily mining process.

Holders can redeem WTIC at the daily spot closing price, although the company does not expect many investors to take physical delivery of crude. Energy Substantiation says the structure allows the underlying oil to be treated as a spot commodity rather than a derivative, which the company says will be subject to lighter regulation.

“Launching a token is easy. The challenge is to create a liquid market,” said Javier Molina, crypto analyst at eToro. “Success will depend on whether they can attract not only crypto players but also energy participants.”

There is clearly demand for around-the-clock oil performance, although much of it is already being met. On HyperLiquid, tokenized WTI and Brent perpetual futures have become the two most actively traded commodity products on the platform, with activity increasing in the wake of the Middle East conflict. CME surprised industry participants – including its own regulator – with plans to offer 24-hour, seven-day-a-week trading in new, smaller crude oil futures by the end of August.

Christian Catalini, founder of the MIT Cryptoeconomics Lab, said that in addition to removing liquidity from already existing products, Energy Substantiation must ensure that blockchain ownership is legally enforceable in the offline world. “For the market to be truly efficient, there must be minimal counterparty risk in the bridge between the online and offline records. Otherwise you are not trading the actual underlying asset, you are essentially trading an IOU.”

In making

Thieriot first floated the idea more than a decade ago after helping build one of crypto’s earliest digital-dollar businesses. But unlike the dollar or gold, crude oil poses major hurdles: Storage is expensive, barrels vary in quality and oil moves constantly through a vast physical network.

Both sides of the company’s digital token. (Energy Affirmation)

The breakthrough came when Thieriot teamed up with financier and mathematician Donald Putnam, who developed a framework for converting different crude grades, measured in British thermal units, into a common energy unit. This model attempts to solve one of the industry’s oldest problems: treating the opposite barrel as a single tradable asset.

The system also relies on inventory that typically sits inside the machinery of the oil business. Pipeline line filling, tank bottoming and other operating inventory are often kept on a company’s balance sheet, but generate little direct revenue. Energy Substantiation’s model attempts to monetize those idle barrels using digital tokens.

“This is the best beta you’ll find in the market,” said Eric Melvin, CEO of Mobius Risk Group and a member of Ensub’s advisory board. He said this, referring to how closely the price of an asset tracks the broader market.

The idea remained largely theoretical until crypto’s institutional acceptance, friendlier regulatory environment, and war in the Middle East pushed oil back into the center of investors’ attention as Energy Substantiation prepared to launch.

“We have dramatically underestimated retail sales in oil,” Thieriot said. In moments of geopolitical tension, the object “really becomes a symbol of global instability,” he said.

Nevertheless, WTIC depends on producers maintaining sufficient inventory to support the token, something that is no longer granted as reserves are cut due to war-driven supply shortages. Energy Substitution says that even during periods of market stress, operating inventories are unlikely to fall to levels that would jeopardize the energy complex.

The company’s pitch has been scrutinized in other ways, too. Texas Railroad Commissioner Wayne Christian, a sitting member of the agency that regulates the state’s oil and gas production, is part of Energy Substantiation’s advisory board and personally emailed potential investors ahead of the token’s launch, as the Texas Tribune reported in April. Christian referred questions from Bloomberg to Energy Substitution, whose spokesperson said he was invited to serve because of his “extensive knowledge of the energy sector” and that he does not direct the company’s day-to-day operations or business decisions.

The startup plans to launch tokens backed by Brent crude and Henry Hub natural gas later this year. Whether those products are successful or not may matter less than what they represent. Stablecoins turned the dollar into an internet-native asset. Projects like WTIC are attempting something similar with commodities, testing whether claims on physical resources can move as freely as digital currency.

“At the end of the day, blockchain makes all of this possible,” Thieriot said.