The U.S. sanctions against Russia are failing as Putin seeks help from BRICS and GCC nations to fuel its economy. The Biden administration pressed sanctions on Russia for invading its neighboring country Ukraine in February 2022.
Despite the sanctions, Russia is conducting business with other developing countries by paying with the Chinese Yuan. The Eastern nations are buying Russian oil at discounted prices by ditching the U.S. dollar for cross-border transactions.
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The Gulf Cooperation Council (GCC) member Saudi Arabia purchased record volumes of discounted Russian fuel oil in June. A month prior in May, Saudi Arabia imported Russian crude oil by paying the Chinese Yuan and laundered it to Europe. Therefore, Russia is indirectly conducting business with Europe with the help of other BRICS countries and GCC member Saudi Arabia.
India is also buying billions worth of oil from Russia at discounted prices by paying the Chinese Yuan and not the U.S. dollar. In 18 months, India saved $7 billion by ditching the U.S. dollar for international trade.
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Russia Gets Oil Deals From BRICS, Saudi Arabia, & GCC Members
Kuwait’s Jasem Mohamed al-Budaiwi, who is now the Secretary-General of GCC, said that the group is keen to provide all forms of cooperation with Russia. The GCC countries include Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman. All six GCC countries are oil-rich and export millions of barrels of oil to the U.S. and Europe every year.
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The Middle East is changing and the oil-rich nations are restoring diplomatic ties with the U.S. and other Western allies. Saudi Arabia and the UAE are expected to join BRICS and begin to accept the new currency for global trade. The U.S. dollar will be under pressure as the alliance looks to challenge its dominance as the global reserve currency.
In conclusion, the U.S. sanctions against Russia are hurting the American economy more than it hurts Russia. The developing Eastern nations could take charge of the global financial landscape if the momentum continues. Read here to know how many financial sectors in the U.S. could be affected if BRICS launch their new currency.