The Role of Mandates and Intermediaries: Streamlining Communication in Oil Trade

In the petroleum market, it is rare for a buyer and seller to transact directly without any intermediary involvement. The reasons are structural: major producers and refiners operate through established commercial channels, and access to their allocations is typically mediated by mandated brokers or agents who have built direct relationships over years of consistent performance.

A mandate is a formal authorisation granted by a principal — typically a producer, refiner, or major trader — to a broker or agent to represent their interests in a specific transaction or category of transactions. A genuine mandate confers real authority: the mandated party can negotiate terms, provide documentation, and commit the principal to a transaction within defined parameters.

The challenge for buyers is distinguishing genuine mandates from the proliferation of self-described intermediaries who claim proximity to supply without any verifiable authorisation. The petroleum market has a well-documented problem with intermediary chains that add no value and introduce significant transaction risk. A buyer who engages with an unverified intermediary chain may find that the supply they were promised does not exist, or that the terms change materially as the chain is unwound.

The most reliable way to verify a mandate is to request a direct communication from the principal confirming the intermediary's authority. This can take the form of a mandate letter, a direct introduction, or a conference call that includes the principal's representative. Any intermediary who resists this verification process should be treated with caution.

At Global United Talent, we operate with full transparency about our position in any transaction. Where we hold a direct mandate, we will provide documentation to confirm it. Where we are working with a mandated counterparty, we will be clear about the structure of the relationship. Our clients deserve to know exactly who they are dealing with at every stage of a transaction.