BRICS has taken the world by storm and it has the potential to change how some of the international markets operate. The BRICS geopolitical group was made by South Africa, China, India, Russia and Brazil. They also invited 5 other countries to join the group next year. Some believe that the main focus for BRICS was to add some counter to the G7. It’s also meant to be a framework that helps lower the dependence on the Western Financial Systems.
How is the BRICS group expanding?
There are many reasons why the BRICS expansion can have major implications. For example, the expansion can have major implications when it comes to energy trading and investment. BRICS is already comprised of multiple countries that have a large number of minerals, not to mention some countries are extremely important in the world of energy consumption.
The new countries that will enter BRICS in 2024 will include UAE, Iran, Saudi Arabia, Ethiopia, Egypt, Argentina. It’s expected to have more countries in this group later on, but it’s hard to know exactly when and how that might happen. One thing is certain, the group is set on expansion, and that can have some repercussions when it comes to energy security.
Will there be any repercussions?
The thing we need to keep in mind is this BRICS expansion is set to have some impact on energy security. By adding Argentina to the group, they are boosting the lithium supply for the bloc. In addition, they are constantly trying to enhance the investment in critical minerals. Brazil already has many critical minerals, and by adding Saudi Arabia and Argentina, BRICS is securing a lot of vital resources. We can expect that countries outside of the group might have to deal with higher prices or at least a change in contracts.
A similar thing can be valid when it comes to the trade flow. We can expect that most countries will continue to use exporting restrictions, although the entire effort might be coordinated. With that in mind, the BRICS expansion might bring the group control over 72% rare earth metals. Aside from that, it’s also possible that the larger BRICS might see more investments in projects which could be avoided by other countries.
As you can see, the BRICS expansion shows the group is solidifying as a major contender to the G7 framework. By adding more countries, BRICS will have access to way more rare earth metals and many other compounds than ever before. It could also affect the oil and gas trade, especially with the addition of Iran, UAE and Saudi Arabia.
