BRICS Will Change the Power Balance in the Global Energy Market
BRICS, 4 Sep 2023
Countercurrents - TRANSCEND Media Service
Countercurrents
28 Aug 2023 – Citing calculations based on 2022 OPEC oil exports and production data, the InfoTech news outlet reported on Thursday [24 Aug]: The BRICS is going to change the power balance in the global energy market.
The report said: Once the BRICS expands with six new member nations to its ranks, it will control nearly half of the world’s oil production and reserves.
BRICS, with Brazil, Russia, India, China, and South Africa, will have Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates as its new members, which will be effective from January 2024.
The report said: The BRICS will greatly increase its weight in the oil market with the inclusion of Saudi Arabia, the UAE, and Iran. Along with current members Russia and Brazil, these nations combined control 39% of the world’s total oil exports, or 17.1 million barrels per day (bpd). The 11 nations of the expanded BRICS will account for around 47.6% of the world’s total oil production, data shows.
In terms of oil reserves, the group will also control nearly half of the world’s total, 719.5 billion barrels out of 1.6 trillion. If Venezuela, which has also recently applied for membership, is accepted into its ranks, the group’s control will be even greater – around 65.4%. In comparison, the G7 group of leading economies, the US, UK, Germany, Italy, Canada, France, and Japan, controls only 3.9% of known crude reserves.
Analysts note that the expansion of BRICS to the Gulf countries is likely to see the US lose its influence in the global oil market.
“Saudi Arabia and the UAE joining is extremely significant. The United States used to rely on the Gulf monarchies, especially Saudi Arabia, to exert control over the oil price. With their accession to BRICS, it seems likely that America has lost control it had over oil prices for the forseeable future,” Irish economist Philip Pilkington wrote in an article for the British portal UnHerd.
According to Pilkington, the outcome of this week’s BRICS Summit also symbolizes the end of Iran’s economic isolation.
“Given that the country is the world’s eigth largest oil producer and possesses the third largest proven oil reserves, this is a substantial economic and geopolitical development,” he wrote.
BRICS Will Make Up nearly 40% Of Global Economy
Citing calculations based on global data, several Russian media outlets reported this week: The addition of six new member states will propel the BRICS group of countries far ahead of its major rival, the G7, in economic terms.
According to reports by RBK and TASS, the combined gross domestic product (GDP) of the expanded BRICS in terms of purchasing power parity (PPP) will be roughly $65 trillion. This would see the bloc’s share of global GDP rise from the current 31.5% to 37%. In comparison, the share of the G7 group of advanced economies is currently around 29.9%.
With the addition of the new members, BRICS nations will account for almost half of the world’s food production. In 2021, the group’s wheat harvest amounted to 49% of the globe’s total. The share of the G7 was 19.1%. BRICS will also have an advantage in terms of the production of metals used in the high-tech industry. The 11 nations will account for 79% of global aluminum output, against just 1.3% controlled by the G7. For palladium, the disparity is 77% for BRICS versus 6.9% for the G7.
The expanded BRICS will account for roughly 38.3% of the globe’s industrial production, versus 30.5% for the G7. However, the latter will retain the advantage in terms of exports, with a share of 28.8% against 23.4% for BRICS.
Saudi Arabia has the largest economy among the new BRICS member states. Its GDP in dollar terms at the end of 2022 was estimated at $1.1 trillion. Meanwhile, the UAE will be a formidable addition to the bloc thanks to its status as a major exporter. Its exports of goods in 2022 amounted to nearly $600 billion.
Overall, the 11 BRICS countries will account for 48.5 million square kilometers, representing 36% of the world’s land area. This is more than double that of the G7. The combined population will amount to 3.6 billion, 45% of the globe’s total and more than four times above the G7.
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Tags: BRICS
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