In 2024, the BRICS alliance—comprising Brazil, Russia, India, China, South Africa, and newly added members—has solidified its position as a formidable force in global trade. With the recent expansion, BRICS now controls an astonishing 42% of the world’s oil and gas reserves. This is a significant milestone that places the bloc in a strategic position in global energy markets. However, the alliance’s influence extends far beyond fossil fuels; BRICS now also holds a staggering 72% of the world’s rare-earth metals reserves, a crucial element for the production of high-tech devices, electric vehicles, and various other advanced technologies.
A Strategic Advantage in Global Trade
The consolidation of such vast reserves of oil, gas, and rare-earth metals gives BRICS unparalleled leverage in global trade negotiations. This newfound dominance not only empowers the bloc in dictating terms but also enhances its ability to stabilize prices within its own markets. The interdependence among BRICS nations for the extraction and production of these critical resources fosters stronger intra-bloc trade, reducing reliance on external partners and mitigating supply chain disruptions.
This collaborative approach is likely to be a key topic at the upcoming 2024 BRICS Summit, where member nations are expected to discuss strategies for maximizing the benefits of their collective resources. A report indicates that the summit’s agenda will focus on “Prospects for cooperation between the BRICS countries in the field of studying, developing and rational use of mineral resources.” Such discussions could lead to the rewriting of geological trade agreements, further cementing BRICS’ role as a dominant player in the global commodities market.
The Impact on Global Financial Dynamics
Beyond resource control, the potential for BRICS to conduct trade in local currencies poses a significant threat to the dominance of the US dollar. If BRICS nations decide to bypass the dollar for transactions involving oil and rare-earth metals, it could lead to a decline in dollar demand and create financial ripples across the globe. This move would particularly impact sectors in the United States that are heavily reliant on these commodities, potentially leading to deficits and economic instability.
Also Read: BRICS Expansion Battle – China And Russia vs. India As Malaysia Awaits
Looking Ahead
As BRICS continues to expand and consolidate its resources, the global balance of power in the oil and rare-earth metals sectors is shifting. The 2024 summit will likely be a turning point, setting the stage for BRICS to leverage its resource dominance for greater geopolitical influence. The alliance’s ability to stabilize prices, ensure supply continuity, and potentially bypass the US dollar in trade could redefine global economic structures in the years to come.
The world is watching closely as BRICS takes center stage in the global commodities market, and the decisions made at this summit could have far-reaching implications for the global economy.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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