BRICS is a group of major emerging economies, originally including Brazil, Russia, India and China, which was termed in 2001 by then Goldman Sachs chief economist Jim O’Neill in a research paper outlining the potential growth of these powers. The bloc was informally founded in 2009, and initiated by Russia, to counter the dominant role of the United States and Western allies in the contemporary world order. It has yet to be formalised, however, heads of state and government meet on an annual basis. South Africa joined the group in 2010 when an S was added to the acronym to make it BRICS. Together, the member states account for over 40 percent of the world’s population and a quarter of the global economy.
The group generally focuses on geopolitics, economic cooperation and multilateral trade and development, and operates by consensus. Since its formation, BRICS says that over 40 countries have shown interest in joining, including Iran, Saudi Arabia, United Arab Emirates, Argentina, Algeria, Bolivia, Indonesia, Egypt, Ethiopia, Cuba, the Democratic Republic of Congo, Comoros, Gabon, and Kazakhstan. Over a dozen countries participated in the “Friends of BRICS” talks in Cape Town in June, demonstrating their interest in shifting the world order and enhancing their position within it. Following the Covid pandemic, the global world order was criticised by several state powers, as Western countries were seen to be hoarding vaccines.
Several oil executives now believe that the sanctions that the West imposed on Russia are encouraging a deeper partnership between BRICS member states. Russell Hardy, the CEO of energy trading firm Vitol, stated“Looking at the oil markets today … the Western sanctions on Russia are working. They’re working in the sense that they’re creating less or lower revenues, lower invoice prices for Russian goods.” However, “The flip side of sanctions is that it is creating stronger bonds between BRICS countries, which in turn is a sort of an opposite force, of polar opposites, to Western politics,” he explained.
It is widely believed that the sanctions could push BRICS nations closer together, particularly due to the recent expansion of the group to include several major oil producers. In August, BRICS officially invited Saudi Arabia, UAE, Egypt, Iran, Argentina, and Ethiopia to become new full-time members, expanding the group from five to 11 states. In 2024, when the new states join, the bloc will account for 37.3 percent of the world’s GDP, which is expected to rise to 37.7 precent in 2025 and 38.5 precent in 2028., according to the International Monetary Fund. The BRICS population will also grow from 3.2 billion at present by at least 400 million, significantly higher than the G-7 combined population of 800 million.
The expansion of BRICS also means that the bloc holds a significant proportion of the world’s natural resources. BRICS states hold around 5,493 tonnes of gold, compared to the G-7’s 17,527 tonnes. Meanwhile, the G-7’s member states US and Canada produce 20 percent and 6 percent of the world’s oil, respectively, and Russia, Brazil and China together account for 21 percent. The share of oil production will rise substantially when Saudi Arabia, the UAE and Iran join the bloc, to around 41 percent of global production. Meanwhile, Russia, Iran and China will contribute significantly to the group’s proportion of gas production. The expansion will also increase the bloc’s representation in Africa, the Middle East and Latin America.
The existing bloc hopes to form a stronger coalition of developing nations that can elevate the interest of the Global South at the international level. The choice of which new states to include in the group surprised many as the six countries invited to join have few commonalities. The choice appears to be very Middle East-centric, perhaps due to their significant resource offerings.
Sanusha Naidu, a senior research fellow at the South African Institute for Global Dialogue, stated, “This has geo-economic, geostrategic and geopolitical implications.” It will likely lead to the deepening of ties between the existing BRICS member states and the Middle East, Naidu suggests. She also addressed the energy-centric decision to include these states, explaining “Besides Russia, all of [the core BRICS countries] are non-energy producing countries. They need to be able to make their economies function, but they don’t want to get caught in the secondary collateral damage of sanctions.”
In reference to the growing presence of BRICS, Fereidun Fesharaki, the chairman of energy consultancy Facts Global Energy, stated “Everybody is irritated by the U.S. government, the U.S. Treasury sanctioning … So people say is there any way to create a counterforce, counterbalance to G7 or G20? BRICS is the candidate.”
As several emerging powers grow increasingly discontent with the existing world order, the BRICS bloc could grow increasingly powerful as a means of countering U.S. and Western dominance. The COVID-19 pandemic and the sanctions imposed on Russian energy last year have worked to bring member states of BRICS closer together. And the announcement of new member states is expected to enhance cooperation between the growing powers, which hold a significant proportion of the world’s resources and account for a large percentage of the global population.
By Felicity Bradstock for Oilprice.com
https://oilprice.com/Energy/Crude-Oil/New-BRICS-Members-Boost-Blocs-Global-Energy-Influence.amp.html
