BRICS is all set to invite Middle Eastern nation Saudi Arabia into the alliance, according to Bloomberg. The move will push the BRICS to expand their influence in the global financial sector and renegotiate oil and gas trade deals. This could lead to a paradigm shift in geopolitics, altering existing bilateral trade deals with the U.S. and other Western countries.
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BRICS is ushering in a new financial era where local currencies and not the U.S. dollar will be used for cross-border transactions. Crude oil plays an important role, and it is the top commodity that has been in demand for decades. The international markets could experience a drastic change if Saudi Arabia accepts the BRICS invitation to join the bloc.
“Major emerging market nations are preparing to invite top oil exporter Saudi Arabia and several other countries to join their bloc in a push to expand its global influence,” reported Bloomberg.
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What Happens To The U.S. Dollar If Saudi Arabia Joins BRICS?
The BRICS alliance, which might include Saudi Arabia, could convince other developing countries to pay in local currencies for oil. The demand could eventually spill into the Western world and force Europe to ditch the U.S. dollar for oil. This could prove costly, as ending dependency on the dollar will create turbulence in the American economy.
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The U.S. will have no means to fund its deficit, and several financial sectors could be impacted. Here are the 10 American sectors that will face the heat if the BRICS start demanding local currencies for oil trade. Egypt could be the second country that might receive an invitation to join BRICS, according to Bloomberg. Both Egypt and Saudi Arabia export millions of barrels of oil and BRICS might gain control of the markets.