BRICS Expansion: Projecting a 90% Reduction in USD-Dominated Oil Sales by 2025?
The expansion of the BRICS nations is sending ripples through the global economy, particularly within the energy sector. Experts are closely analyzing the potential for a significant shift away from the US dollar in international oil trade, with some projections suggesting a dramatic 90% reduction in USD-dominated oil sale settlements. How likely is this, and what factors are driving this potential transformation?
The Power of an Expanded BRICS
The inclusion of major oil-producing nations like the UAE, Iran, and potentially Saudi Arabia, as snippets suggest "Expanding the BRICS group of nations to include the UAE, Iran and potentially Saudi Arabia could help to align the economic goals of members now controlling", into the BRICS alliance is pivotal. This expansion brings a substantial portion of global oil reserves under the BRICS umbrella. VisualCapitalist.com analysis highlights that "the new, expanded BRICS will now collectively represent 43% [of global oil production]". This concentrated influence over global oil production and distribution could indeed challenge the USD\'s long-held dominance.
De-Dollarization in the Oil Market: A 2025 Projection
While a complete and immediate shift away from the USD is unlikely, gradual de-dollarization appears increasingly probable. The BRICS alliance could gain control of the majority of the world\'s oil and gas trade by including Saudi Arabia and the United Arab Emirates, which could lead to a shift away from the USD. The date 28 de sept. de 2025 is brought up in some analysis but how credible are those dates remains to be seen.
BRICS Consumer Market Growth: Fueling the Shift
The economic strength of the BRICS nations, particularly their burgeoning consumer market, is a crucial element in this de-dollarization narrative. "By 2025, the BRICS consumer market is projected to nearly double, reaching USD25 trillion in annual spending and expanding at three times the pace of the G7." This massive internal demand reduces reliance on external markets and strengthens the argument for trade settlements in currencies other than the USD.
Geopolitical Implications and the G7\'s Response
The rise of BRICS and its potential impact on the global economic order are undoubtedly influencing geopolitical dynamics. As the BRICS expands its influence, "The expansion of the BRICS could encourage greater political overtures and financial generosity from the G7 towards emerging markets going forward". The G7 may need to adapt its strategies to maintain its economic competitiveness and influence in a world where the BRICS nations wield increasing power, particularly in the realm of energy and trade.
Larger BRICS to dominate oil pricing?
The expansion of the BRICS group, combined with the inclusion of major oil-exporting nations, carries profound implications for the oil markets. Whether the oil price will rise depends on internal economic factors and cooperation amongst BRICS nations.