The importance of consortiums in safeguarding each nation’s economic future is extensively documented, particularly in my blog. The concept of unity appears to be increasingly resonating with nations, especially when their commodity strength is at stake.
The BRICS alliance, initially a five-country cohort representing the emerging economies of Brazil, Russia, India, China, and South Africa, has recently undergone an expansive reshaping. This move places BRICS at the center of the global commodities stage, particularly crude oil.
The recent inclusion of six more countries – Argentina, Egypt, Ethiopia, The United Arab Emirates (UAE), Iran, and notably, Saudi Arabia with its trillion-dollar-plus GDP – means that the BRICS alliance will now represent a staggering 43% of global crude oil production. This is monumental when we consider that the combined GDP of BRICS has already surpassed that of the G7, and will now control 29% of global GDP.
Yet, for such a significant realignment of international power dynamics, the response from the Western media has been somewhat muted. But there’s no ignoring the major geopolitical implications this expansion brings, particularly concerning global crude oil markets.
Historically, as dominant players in the OPEC+ alliance, Saudi Arabia and Russia have had their differences, most notably in March 2020. This disagreement threatened to break the alliance, causing crude prices to plummet. With their shared membership in the expanded BRICS, there’s an opportunity for more harmonized cooperation, potentially stabilizing OPEC+ operations. The world will be watching closely.
The BRICS group was already a heavyweight in the crude oil arena. With the world’s 1st and 3rd largest crude importers, China and India, any decisions made by this bloc are bound to ripple across the globe. The inclusion of other crude-rich countries will not only enhance oil trading relationships within BRICS but also challenge the previously unified global market for this crucial commodity.
Interestingly, despite efforts by the U.S. and other Western nations to deter Saudi Arabia from joining, the nation pursued BRICS membership doggedly. This move underscores the shifting alliances and the kingdom’s determination to diversify its partnerships.
Looking at the new members, some eyebrows have been raised regarding Ethiopia’s inclusion, considering its economic stature. However, Ethiopia’s close ties with China, especially its significant role in China’s Belt and Road initiative, offer some insight. China’s vocal support for Ethiopia underscores the strategic importance of this partnership. As stated, China is keen on bolstering Ethiopia’s role in international and regional matters, aligning their efforts for global justice and fairness.
Egypt’s inclusion might seem surprising to some, but a closer look reveals its hidden commodity strength. Unknown to many, Egypt stands as the world’s 13th-largest producer of natural gas. This production surpasses some well-established oil giants, including the UAE, Mexico, and Brazil. Undoubtedly, this factored into Egypt’s admission to the alliance.
So keep your eyes and ears open, as the expansion of BRICS is not just a mere addition of countries; it’s a significant realignment of global power, especially in the crude oil and commodities arena. Western nations and press might downplay or remain silent on this movement, but it’s undeniable that the center of gravity in global crude oil geopolitics is shifting.
The BRICS alliance’s metamorphosis is set to redefine trade, diplomacy, and influence in the decades to come.
