Amid the alliance’s ongoing de-dollarization efforts, experts have stated that the BRICS expansion could be the final step in eliminating the US dollar (USD) from the oil trade. Indeed, the prediction arrives as the bloc invites six countries to join its ranks. Moreover, the incoming nation has a strong presence in the international oil trade.
Ultimately, nations that continue to purchase oil in alternative currencies will affect the petrodollar. Subsequently, limiting the overall international presence of the greenback, specifically in the oil sector. Although that has seemingly always been a goal of the bloc, its expanded membership provides a pathway to that reality.
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BRICS Expansion Set to Eliminate USD from the Oil Market?
For much of the year, the BRICS economic alliance has sought to develop a multipolar world. The bloc has expressed its grandiose ideas of multipolarity in line with its belief in the hindering presence of Western dominance. Subsequently, it has sought to eliminate the overall presence of the US dollar, specifically its global reserve status.
Now, following the BRICS six-country expansion, experts have predicted that the decision will eliminate USD from the oil trade. The bloc added Saudi Arabia, Iran, the United Arab Emirates (UAE), Argentina, Egypt, and Ethiopia to its ranks. All of which could play a role in isolating the Western currency from that sector.
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A recent report has highlighted insight from financial analysts pointing to the diminishing presence of the petrodollar system. Moreover, it notes that the rise in the alternative currency could only continue. Ultimately, this sealed the fate of internal reliance on the greenback.
The UAE has already embraced oil trade in alternative currencies Specifically, this year has seen the country and India agree on a landmark oil deal in rupees. However, the alliance must remain vigilant so that its currencies can continue to perform well. Indeed, the tumultuous state of the oil trade and BRICS local currencies could develop a narrative that counters this.