The BRICS alliance, now expanded to include 11 member nations, has emerged as a formidable powerhouse in the global energy market. This expanded group, comprising Brazil, Russia, India, China, South Africa, Saudi Arabia, the UAE, Iran, Egypt, Ethiopia, and Indonesia, represents a significant shift in geopolitical and economic dynamics. According to recent reports, the convergence of the world's top oil producers—Saudi Arabia, Russia, Iran, and the UAE—with the largest oil consumers, namely India and China, on a single platform grants BRICS control over approximately 41 to 47 percent of the global crude oil supply. Also, the bloc now holds the rights to nearly 50 percent of the world's proven natural gas reserves.
Energy Security and Economic Significance
Representing 25 percent of the global nominal GDP and nearly half of the world's population, this bloc has convened in New Delhi amidst heightened concerns over energy security and escalating tensions in West Asia. However, possessing this 'oil jackpot' brings forth a series of complex challenges, while unlike established cartels such as OPEC+, BRICS lacks an integrated institutional framework, leading to conflicting energy interests within the group. Exporting nations like Russia, Saudi Arabia, and Iran favor higher crude prices to maximize national revenue, whereas import-dependent nations like India and China seek affordable and stable energy supplies to sustain their economic growth.
The Difficulty of a Common Energy Policy
With members like Russia, Saudi Arabia, Iran, and the UAE, BRICS handles a massive portion of the world's total crude oil production. Yet, the group isn't a traditional oil cartel. The energy requirements of its members vary Importantly. Some nations are heavily dependent on oil and gas exports, while others are major importers. China and India are among the world's largest energy consumers, while other members are striving to increase their renewable energy manufacturing capacity. Burzine Waghmar from the SOAS South Asia Institute at the University of London noted in an ET report that BRICS might struggle to act as a safety net during energy crises or global resource shortages. Despite controlling over 42 percent of crude production and half of the natural gas reserves, the alliance lacks the necessary institutional framework, unified political will, and physical infrastructure to handle real-time supply or price fluctuations.
Crude Oil Surges Past 100 Dollars
The summit in New Delhi is taking place at a critical juncture, following military strikes by the US and Israel against Iran, which became a BRICS member in 2024. This conflict has disrupted shipping through the Strait of Hormuz, one of the world's most vital oil routes, causing crude prices to soar above 100 dollars per barrel. 07 dollars per barrel on Thursday as new attacks on maritime shipping intensified concerns over supply through the strait. Historically, about one-fifth of the world's total oil and gas supply passes through this waterway, making any prolonged disruption a major risk for Asia's energy-importing nations. This conflict has also created internal friction within BRICS; the UAE suspended trade and financial transactions with Iran in August after claiming to be a victim of Iranian missile attacks. The challenge now is whether both nations can agree on the language of a joint BRICS statement regarding this conflict.
Searching for a Common Formula
Kremlin spokesperson Dmitry Peskov stated that the differences between the UAE and Iran have had a negative impact, making it difficult to draft a joint declaration. However, there is hope that leaders can find mutually acceptable language, while former Indian diplomat Rajiv Bhatia, as cited in a Reuters report, suggested that such groups can reach a consensus despite differences. He pointed to the Shanghai Cooperation Organisation (SCO) summit in Bishkek, where members, including those with pro-US stances, successfully formulated a consensus. The New Delhi summit sees the attendance of several key leaders, including Chinese President Xi Jinping, making his first visit to India in seven years. Other attendees include Russian President Vladimir Putin, Iranian President Masoud Pezeshkian, South African President Cyril Ramaphosa, Indonesian President Prabowo Subianto, and UN Secretary-General Antonio Guterres.
A Shift Beyond Oil
The debate over energy is only one part of the broader BRICS narrative. The group is also working to increase the use of local currencies in trade to challenge the dominance of the petro-dollar. This economic environment is further complicated by US President Donald Trump's criticism of BRICS and his threats to impose additional tariffs on countries supporting what he terms anti-American policies. While the market doesn't expect the New Delhi summit to cause immediate major shifts in oil prices, long-term developments are more significant, while radhika Rao, Senior Economist and Executive Director at DBS Bank, noted that discussions are likely to cover West Asian conflicts and energy market concerns, given that the expanded BRICS group includes a mix of hydrocarbon exporters, fossil fuel-dependent nations, clean energy manufacturers, and energy-import-dependent economies.