The White House pressed sanctions against Russia in February 2022 for its role in invading and waging war against its neighboring country Ukraine. The Russian economy came to a standstill as it struggled to conduct business with other countries without the US dollar. However, BRICS came to the rescue of Russia, as the alliance kick-started the de-dollarization initiative and began using local currencies for crude oil payments sidelining the US dollar.
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BRICS members China, India, Saudi Arabia, and the UAE, among others, paid the Chinese Yuan for Russian oil and not the US dollar. Russia is now exporting crude oil to BRICS and other developing countries without accepting the US dollar as payment. The majority of the cross-border transactions are settled in local currencies like the Chinese Yuan and Ruble.
Additionally, Saudi Arabia procured cheap Russian oil and also laundered it throughout Europe. Russian crude oil is now available at discounted prices due to the sanctions and other countries are making the most out of it. India saved $7 billion a year by paying in local currencies for oil and not the US dollar.
Also Read: BRICS: U.S. Dollar Dips Against Local Currencies
Moreover, BRICS is strengthening their native economies by putting local currencies first and not the US dollar. Read here to know how many sectors in the US will be affected if BRICS stops using the dollar.
BRICS: Payments For Russian Oil Used Less Than 10% in US Dollars
BRICS member Russia sold crude oil in local currencies across the world and used the US dollars for less than 10% of all transactions, reported Business Insider. Around 90% of the oil settlements were initiated in local currencies like the Chinese Yuan and Russian Ruble.
Also Read: BRICS: De-Dollarization Gaining Steam in Developing Countries
Even the Gulf Cooperation Council (GCC) had revealed that the bloc will provide business to Russia using local currencies. In that way, the Russian economy could sail safely and stand tall despite the US sanctions.
Both BRICS and the GCC are helping Russia conduct business without the US dollar for crude oil. In conclusion, Russia seems to have successfully bypassed the US sanctions with the help of other developing countries.