The BRICS group of nations is set to become a major player in the global energy market, according to calculations based on 2022 OPEC data on oil exports and production. As reported by InfoTech, the group’s expansion, including the addition of six new nations, will give it control over nearly half of the world’s oil production and reserves.
Currently consisting of Brazil, Russia, India, China, and South Africa, the BRICS group announced at its summit in Johannesburg this week that Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates will officially join in January 2024. This expansion will significantly increase the group’s influence in the oil market, particularly with the inclusion of Saudi Arabia, the UAE, and Iran. These new members, along with existing members Russia and Brazil, collectively control 39% of the world’s total oil exports, equating to 17.1 million barrels per day (bpd). Once the expansion is complete, the 11 nations of the expanded BRICS group will account for approximately 47.6% of global oil production.
The BRICS group will also have a significant share of the world’s oil reserves, controlling nearly half of the total reserves. Out of 1.6 trillion barrels, BRICS will have control over 719.5 billion barrels. Furthermore, if Venezuela, which has also applied for membership, is accepted, the group’s control will increase to around 65.4%. In comparison, the G7 group of leading economies, including the US, UK, Germany, Italy, Canada, France, and Japan, only controls 3.9% of known crude reserves.
The expansion of BRICS to include Gulf countries like Saudi Arabia and the UAE is expected to lead to a reduction in the US influence in the global oil market. Irish economist Philip Pilkington commented that the US used to rely on Gulf monarchies, especially Saudi Arabia, to exert control over oil prices. However, with their accession to BRICS, it seems likely that the US has lost its control over oil prices for the foreseeable future.
Pilkington also highlighted that the inclusion of Iran in BRICS signifies the end of its economic isolation. Iran, being the world’s eighth largest oil producer and possessing the third largest proven oil reserves, holds significant economic and geopolitical importance.
Overall, the expansion of the BRICS group, with the addition of key oil-producing countries, will result in a shift in the power balance within the global energy market. The group’s increased control over oil production and reserves, coupled with the likelihood of reduced US influence, will have far-reaching implications for the energy landscape. This development highlights the growing importance of BRICS as a major player in shaping the future of the global energy industry.