The economic, political and social alliance composed of Brazil, Russia, India, China and South Africa (BRICS) is pressuring the Middle East to abandon the US dollar for oil trade. This is demonstrated by recent statements by Russian President Vladimir Putin, who suggested that the North American currency would be a serious blow if it were no longer used for oil deals.
Vladimir Putin, the re-elected President of Russia, who formally assumed chairmanship of the BRICS group at the beginning of the year, may have suggested that delinking oil trade from the dollar would be the end of the US currency. A Comment shared By BRICS account in X.
This alliance of countries Taking rapid steps towards de-dollarizationAs reported by CriptoNoticias, to the point of developing its own payment system based on cryptocurrency or central bank digital currency (CBDC).
However, decoupling dollar trade from the Middle East would be an important step, as they produce about 35% of the oil traded in the world.
In this sense, the main oil producers in the Middle East, such as Saudi Arabia, Iran, Iraq, the United Arab Emirates, Kuwait and Qatar, They form an important group when it comes to agreements related to fossil fuels.
In fact, part of the stability achieved by the dollar in recent decades was the result of a military agreement between the United States and Saudi Arabia in 1974, when the price of oil was set in dollars.
As stated a report According to Bloomberg, the infrastructure was “surprisingly simple”. The United States “will purchase oil from Saudi Arabia and provide aid and military equipment to the kingdom. In return, the Saudis will invest billions of dollars of their petrodollar earnings in treasury bonds Will finance American spending.”, So that’s how the petrodollar was born, or the same thing: US dollars were paid to an oil exporter in exchange for barrels of that product.
OPEC’s dollar profits were subsequently recycled into the US treasury to subsidize “the indebted policies of the US government as well as the indebted consumption of its citizens”. exposes it Economist David Spiro.
And although there are critics who believe otherwise, there are also who thinks that when countries are forced The United States strengthens by exchanging its currencies for dollars to buy oil Spreading our influence beyond energy markets.
Therefore the fact that BRICS is raising the possible scenario of financial restructuring with the intervention of Middle Eastern countries will undoubtedly be a significant fact that will affect the global financial system.
