Quote from chief_editor on January 17, 2026, 7:42 am

In international commodity and energy trade, few words are used more loosely — and more dangerously — than “mandate”.

Emails arrive claiming:
“Direct mandate of the refinery”
“Exclusive mandate from the seller”
“Official mandate holder for allocation”

Soon, everyone in the chain appears to be a mandate.

In real markets, this is a contradiction.
If everyone is a mandate, no one actually is.

What a Mandate Is Supposed to Mean

In its proper sense, a mandate is simple and powerful.

A mandate means one thing:
authority to commit or bind a party within defined limits.

A true mandate holder can:

• speak for the seller or buyer

• control information flow

• approve or reject counterparties

• move the deal to the next formal step

Mandates are about authority, not proximity.

Why Mandates Are Rare in Real Trade

Real mandates are scarce because they carry risk.

Granting a mandate means granting control over:
pricing discussions
counterparty exposure
reputation
sometimes even legal liability

Most producers, refiners, and serious traders limit mandates tightly, often to internal staff or long-standing partners.

This is why in real transactions, you rarely see long chains of mandated brokers.

Authority does not multiply — it concentrates.

How “Mandate Inflation” Happens

In weak or fake deal environments, mandate inflation appears quickly.

One intermediary hears an SCO and calls themselves a mandate.
Another intermediary adds “exclusive”.
Soon, five parties claim mandate status over the same product.

None of them can:
issue an FCO
approve buyer credentials
explain allocation logic

The word “mandate” is used to substitute credibility.

This inflation destroys trust instead of creating it.

Why Serious Buyers Ignore Mandate Claims

Experienced buyers rarely ask “are you a mandate?”

They ask:
Who issues the FCO
Who signs the SPA
Who controls delivery and payment

If the answers are unclear, the mandate claim is irrelevant.

Authority is proven by action, not by title.

This is why serious buyers often disengage silently from mandate-heavy conversations. They recognize that no real decision-maker is present.

Why Fake Deals Depend on Mandates

Fake deals need mandates because they lack substance.

Without product control, logistics, or banking structure, the only asset left is claimed authority.

Mandate language allows deals to circulate without accountability.
Responsibility is always “upstream”.

This is also why mandate-heavy deals resist verification. Verification exposes the absence of real authority.

A Simple Test for Real Authority

Instead of asking for mandate letters, ask one question:

“Who can issue the FCO on this?”

A real mandate holder will answer clearly.
A fake one will deflect.

Authority reveals itself quickly when escalation is required.

A Practical Rule of Thumb

If authority is claimed everywhere, it exists nowhere.
If authority is real, it does not need to be announced repeatedly.

In commodity trade, power shows up in documents and decisions — not in signatures on mandate letters.

Final Insight

Real deals move forward through controlled authority.
Fake deals move sideways through inflated titles.

Learning to distinguish the two is one of the most valuable judgment skills in trade.

Reference Note

This article reflects commonly observed practices in international commodity and energy trading. It is intended for industry insight and trade education purposes only.