BRICS Nations Command 47% of Global Oil; U.S. Share Stands at 2.1%

The BRICS alliance, consisting of Brazil, Russia, India, China, and South Africa, has solidified its dominance in the global oil market, collectively controlling 47% of the world's oil supply. This substantial influence raises questions about the implications for global energy dynamics, especially in contrast to the United States, which holds a modest 2.1% share in the oil market.

Saudi Arabia's Entry Amplifies BRICS Power

Recent developments saw Saudi Arabia officially joining the BRICS alliance, marking the first major oil-producing nation to do so. With this addition, BRICS now oversees around 50% of global oil production, indicating a significant shift in power dynamics in the energy sector.

Impact on the United States

The United States, a major player in geopolitics and energy, possesses only a fraction of the global oil market, standing at 2.1%. The entry of Saudi Arabia into BRICS further underscores the potential challenges for the U.S., particularly if BRICS nations begin accepting local currencies for energy payments. This shift could impact the value of the U.S. dollar significantly.

BRICS Oil Holdings Breakdown

Breaking down the oil holdings of each BRICS nation, Saudi Arabia leads with 17% of global oil production, followed by Russia with 12%, Iran with 9.5%, the United Arab Emirates with 5.9%, China with 1.5%, Brazil with 1%, and India with 0.3%. Collectively, these holdings contribute to BRICS' commanding 47% share.

Potential De-Dollarization Impact

The risk of the U.S. dollar losing its prominence in oil payments looms large if BRICS nations decide to transact in their local currencies. While Saudi Arabia has expressed readiness for such arrangements, it is yet to be implemented, and current transactions continue to be conducted in U.S. dollars.

Oil Prices React to Geopolitical Tensions

Oil prices experienced stability after a significant decline, with West Texas Intermediate trading near $76 per barrel and Brent crude at $81. Geopolitical tensions, including a potential U.S. response to an attack in Jordan, have added uncertainty to the oil market. President Joe Biden's announcement regarding the decision on the response, implicating Iran in the attack, has further contributed to market apprehension.

U.S. Oil Production and OPEC+ Monitoring

U.S. oil production reached 13.3 million barrels per day in November, surpassing previous highs. Weekly production returned to 13 million barrels per day, while crude stocks increased. Investors are closely monitoring OPEC+ for any market commentary following the Joint Ministerial Monitoring Committee's meeting, seeking insights into future oil market dynamics.

In summary, the BRICS alliance's increasing control of the global oil market raises challenges for the United States, with potential implications for the U.S. dollar. Geopolitical tensions and oil market dynamics continue to influence oil prices, creating uncertainties in the energy sector.