BRICS could shift the global power dynamics in their favor by controlling the majority of the world’s oil and gas trade. The bloc is keen on expansion by allowing Saudi Arabia and the United Arab Emirates into the group. The inclusion of Saudi Arabia and the UAE into BRICS could have a paradigm shift in the oil economy, as it could force other countries to drift away from the USD. Therefore, the first step of the de-dollarization process could begin with oil and gas sales.
A handful of oil-producing Middle Eastern countries have expressed their interest in joining the bloc. Apart from Saudi Arabia and the UAE, Bahrain, Egypt, and Algeria are looking to join the BRICS. The five Arab nations represented 60% of the world’s oil reserves, and induction into BRICS could spell doom for the U.S. dollar.
BRICS: 90% of Oil Sales Might No Longer Be Settled in the USD
If the BRICS alliance inducts all five oil-producing countries, it could control 90% of the world’s oil supply. This could lead to 90% of the oil and gas trade being settled in local currencies and not the USD. The international markets could subsequently shift away from the U.S. dollar and usher in a new era of global finance.
Also Read: Can BRICS Abandon the U.S. Dollar?
Accepting local currencies for oil and not the USD could fast-track the de-dollarization process. Countries in Asia, Africa, and South America are most likely to accept paying in native currencies rather than the USD. If BRICS controls crude oil, the U.S. economy could face hardships as the means to fund its deficit narrows. In conclusion, the upcoming BRICS summit holds the key to the U.S. dollar’s prospects.