- China continues to work to shape a new global market order in oil markets.
- With the addition of all three new members, the BRICS group would control around 41 percent of all global oil production.
- Moving away from the petrodollar and replacing it by the renminbi has been a priority for Chinese President Xi.
By Simon Watkins
Piece by piece, China continues to build alternatives to each of the key building blocks of the West’s world order, including – crucially – a new global oil market order, as analysed in full in my new book of the very same name. The latest building block is the invitation to three of the world’s biggest oil and gas powers – Saudi Arabia, Iran, and the UAE – to join the BRICS political and economic grouping, comprised of Brazil Russia, India, China, and South Africa. This can be considered as a developing world alternative to the U.S.-dominated Group of Eight (G8) major industrialised nations from which Russia was suspended indefinitely in March 2014 following its annexation of Ukraine’s Crimea. As it stands, Iran and the UAE said that they will accept the invitation, while Saudi Arabia stated that it is considering the proposal. With the addition of all three new members, the BRICS group would control around 41 percent of all global oil production, according to International Energy Agency estimates. In practical terms, though, it is irrelevant whether Saudi Arabia formally joins or not, as all three countries – and virtually all of the Middle East’s major oil and gas players – have already pledged their allegiance to China in one of its geopolitical building blocks or another. While BRICS can be considered China’s alternative to G8 (now G7 again following Russia’s permanent withdrawal in January 2017), the Shanghai Cooperation Organisation (SCO) is a much bigger deal altogether. As exclusively reported by OilPrice.com at the time, and analysed in full in my new book, Saudi Arabia had already signed a memorandum of understanding on 16 September 2022 granting it the status of SCO ‘dialogue partner’. At that point, the Kingdom did nothing to encourage the release of the news at that point, unlike later in April this year – just after it had agreed to a stunning resumption of a relationship deal with Iran, brokered by China. By then, Saudi Arabia had decided that the time was right to ensure full coverage for the news that its cabinet had approved a plan to join the SCO as a dialogue partner. As also exclusively reported by OilPrice.com at the time, Iran approved its own ‘full membership’ to the SCO back in September 2021 and was granted it on 4 July this year. Iran’s membership of the SCO simply rubber-stamped China’s control over the country – and over neighbouring Iraq, heavily influenced by Iran – through the all-encompassing ‘Iran-China 25-Year Comprehensive