Tether enters the oil market by funding a $45 million trade

Leading stablecoin firm Tether is looking to become a top player in the trading of commodities.

The firm disclosed it entered the oil market in October, when it placed a trade to “load and transport” 670,000 barrels of Middle Eastern crude oil, valued at approximately $45 million.

Tether, the issuer of the largest stablecoin USDT, is one of the most profitable crypto companies. The company registered $2.5 billion in net profit in the third quarter of 2024, bringing its year-to-date profits to $7.7 billion.

“This transaction marks Tether Investments’ first crude oil transaction in the region and highlights the company’s expanding role in global commodities trading,” the company wrote in a press release on Friday.

Tether Investments is a new division of the firm aimed at supporting the “$10 trillion trade finance industry.” The unit is reportedly siloed away from the reserve assets that back the U.S. dollar-denominated USDT stablecoin.

Paolo Ardoino, elected as CEO last year, is attempting to diversify Tether’s balance sheet and has invested in a number of industries including artificial intelligence and peer-to-peer communications.

Ardoino told The Block the deal is structured as a “short-term product prepayment,” with the stablecoin issuer set to receive both the principal amount and interest back from the recipient. This structure essentially functions as debt financing.

Yogita Khatri contributed reporting.