The BRICS bloc, comprising Brazil, Russia, India, China, and South Africa, has emerged as a significant player in the global oil market. Recent developments suggest that BRICS countries collectively control a substantial portion of the world’s oil supply. As of the latest data, BRICS nations hold sway over 47% of the global oil market, underscoring their growing influence in the energy sector.
In contrast, the United States, a major player in global geopolitics and energy, owns a comparatively modest share, accounting for just 2.1% of the world’s oil market. This shift in the balance of power raises questions about the implications for global energy dynamics and geopolitical relations.
BRICS nations tighten grip on global oil market
Wednesday marked the official entry of Saudi Arabia into the BRICS alliance, making it the first major oil-producing nation to do so. BRICS initiated a shift in power with the addition of Saudi Arabia, which now regulates approximately 50% of global oil production.
The development imperils the prospects of the United States, which possesses a negligible amount of crude in comparison to the BRICS nations. The stakes are extremely high; the US dollar will plummet if BRICS begin accepting local currencies for energy payments.
The United States currently holds only 2.1% of the world’s oil, while the BRICS alliance controls 47%. If payment in native currencies is required from developing countries, the United States dollar will be severely impacted. Detailed below is the total amount of oil held by each BRICS nation.
Saudi Arabia owns 17% of global oil production, Russia holds 12%, Iran has 9.5%, The United Arab Emirates holds 5.9%, China has 1.5%, Brazil accounts for 1%, and India has 0.3%. This brings the total a whopping 47%.
Saudi Arabia recently affirmed its readiness to accommodate payments denominated in local currencies from other developing nations. However, local currency oil settlements have not yet been initiated.
Therefore, U.S. dollars are used for transactions. However, the potential for the US dollar to be marginalized in oil payments persists due to the fact that BRICS initiated the de-dollarization movement.
Oil prices brace for impact as US prepares response to Jordan attack
Wednesday, following its steepest decline in three weeks, oil remained stable as investors considered the dangers of a US retaliation against indications of a robust American supply in response to a deadly attack in Jordan.
Following the most significant decline since early January, West Texas Intermediate fell 2.5% in the previous session and was trading near $76 per barrel. Brent crude remained unchanged at $81. On Wednesday, prices were subject to downward pressure due to data documenting the expansion of petroleum stockpiles in the United States and unprecedented oil production.
Without providing further details, President Joe Biden stated earlier this week that he had decided how to respond to the attack that killed American forces over the weekend. He asserted that Iran supplied the weaponry used in the attack. However, Tehran has denied any involvement and pledged to retaliate against any attack on its territory or assets overseas.
November oil production in the United States increased to 13.3 million barrels per day, surpassing the previous high set in September, as the Energy Information Administration reported. Additionally, according to the data, weekly production returned to 13 million barrels per day, and crude stocks increased for the first time in three weeks.
Investors will closely monitor OPEC+ for any market commentary that may be released subsequent to the Joint Ministerial Monitoring Committee’s meeting scheduled for later Thursday.
January marked the end of oil’s first monthly increase in four months due to the Houthi rebels’ escalation of assaults on commercial vessels in the Red Sea. However, price increases have been restrained by apprehensions regarding demand from key consumers and a robust supply from non-OPEC producers.
Source: https://www.cryptopolitan.com/brics-dominance-surges-with-47-of-worlds-oil/