The BRICS alliance grew in numbers in 2023, with multiple nations being invited to join the bloc and officially joining at the beginning of 2024. Most of these nations are also rich economies, such as the UAE and the decision-looming Kingdom of Saudi Arabia. These countries make most of their riches off their abundance of national resources, particularly in oil.
With more expansion expected in 2024, BRICS has the potential to not just raise its combined GDP, but have a bigger influence in the oil markets. The bloc has already made significant strides in both controlling more of the oil trade and de-dollarization. In particular, the BRICS alliance now controls 47% of the world’s oil while the US holds only 2.1%.
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The expansion of the BRICS bloc puts the US prospects in peril as America only holds a fraction of oil compared to the alliance. As a result, the stakes are high for the United States. If BRICS starts accepting local currencies for oil payments, the US dollar may start to decline.
BRICS Nations Making Its Way Into Oil Market
Furthermore, BRICS founder China has taken significant strides in expanding its control over oil. In particular, China is taking undue advantage of lower crude oil prices by stockpiling 1.39 million barrels every day since December. This is a direct result of sanctions against fellow BRICS nation Russia, however, this goes back to the recent ideology that China can see some of the biggest benefits from BRICS and its expansion.
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Other BRICS nations, such as Russia and South Africa, have also begun making oil trades and deals without the US Dollar. With the expansion of the bloc including oil-rich nations, one can expect even more of this trend in 2024, especially if other oil-rich economies join the bloc later in the year.