Entry of Middle Eastern Nations Into BRICS+: Important Economic and Geopolitical Takeaways

Five countries – Saudi Arabia, Iran, the United Arab Emirates, Ethiopia and Egypt entered BRICS as full members on Jan. 1, now referred to as BRICS+. The BRICS grouping was created in 2006 by Brazil, Russia, India and China, while South Africa joined BRICS in 2011.

In 2024, Russia will hold the Chairmanship of BRICS+. While referring to the entry of the new members, Russian President Vladimir Putin said, “We will spare no effort to ensure that, while preserving traditions and being guided by the experience gained by the association in years past, we facilitate the harmonious integration of new participants in all formats of its activities.”

With the entry of these countries, BRICS+ now accounts for a significant percentage of the global economy and population. The organization also accounts for over 40 percent of global crude oil supply. Several other countries from the global south have evinced interest in joining BRICS.

Importance of Middle Eastern countries joining BRICS+

The entry of three Middle Eastern countries — Saudi Arabia, UAE, and Iran, is especially important for both economic and geopolitical factors (Egypt is the fourth Middle Eastern country to have got membership of BRICS+).

The economic dimension

Saudi Arabia along with Russia has been at the forefront in the OPEC+ decision to bring down oil production with the objective of keeping oil prices high. At the OPEC+ ministerial meeting in November 2023, Saudi Arabia stated that it would extend voluntary reduction in oil production of 1 million barrel per day (bpd), till the first quarter of 2024, while Russia said that it would not only extend oil cuts, but further reduce oil production (Russia will reduce its oil production by 5,00,000 bpd as opposed to 3,00,000 bpd).

Iran has been supplying large quantities of oil to China, in spite of US sanctions. Iran accounts for 10% of China’s crude oil imports. There has been a drop in Iranian oil imports to China, since Iranian oil producers have been demanding higher oil prices and China has been purchasing oil at discounted prices from Russia and Venezuela. In December 2023, China imported 1.18 million bpd of oil from Iran while in October 2023, China imported 1.53 million bpd from Iran. The entry of Iran as a full member into BRICS+ could provide much needed economic opportunities which could help the Middle Eastern nation in putting its economy back on track. US sanctions have taken a toll on Iran’s economy and the revival of the Iran nuclear deal seems unlikely in the current scenario, in such a situation Iran needs to harness the possibilities emerging out of the entry into BRICS+.

The UAE has been strengthening economic ties with China, while also maintaining strong economic ties with Russia, in violation of US sanctions, much to the displeasure of the US.

Saudi Arabia, UAE and Iran have all been seeking to reduce their dependence upon the US dollar. Iran had finalized an agreement with Russia in December 2023, to use local currencies for trade. Apart from this, Saudi Arabia and UAE too have been supporting de dollarization initiatives. India, an important member of BRICS has signed an agreement with UAE for usage of local currencies for cross border transactions. In December 2023, India made its first ever payment in Rupees for crude oil purchased from UAE.

The geopolitical implications of UAE, Iran and Saudi Arabia becoming full members of BRICS+

In terms of geopolitics, Iran’s ties with the US went downhill after the US withdrawal from the Iran nuclear deal/ Joint Comprehensive Plan of Action – JCPOA — and as a result Tehran’s ties with both China and Russia have strengthened significantly. The Israel-Palestine conflict has seen a further deterioration in ties between the west, especially the US, and Iran and diminished the possibility for reducing tensions between both sides.

Saudi Arabia and UAE while having strengthened ties with China share close ties with the US in the economic and strategic sphere. While tapping the economic benefits of joining BRICS+ neither would like to be part of ‘anti-west’ rhetoric and would like to remain away from geopolitical wrangling between US and China.

The entry of 5 countries, especially three Middle Eastern countries — is likely to impact BRICS+ significantly and has important economic and strategic implications. BRICS+ expansion is a strong reminder of the fact that the current global order cannot be viewed from hackneyed zero-sum prisms of the past.

[Photo by Prime Minister’s Office, India, via Wikimedia]

The views and opinions expressed in this article are those of the author.

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