Almost 15 years after the BRICS coalition of major emerging economies was founded in 2009, the group has still not achieved its goal of displacing the US dollar as the dominant global currency.

But the alliance, originally made up of Brazil, Russia, India, China and South Africa, took a major step toward developing its collective monetary power at its recent summit in South Africa.

Six new members joined the organization – Saudi Arabia, Iran, Ethiopia, Egypt, Argentina and the United Arab Emirates – in an effort to curb the dollar’s decades-long dominance and end its use as the preferred means of payment for the only commodity still available World trade always dominates: oil.

“De-dollarization” of the global economy could have dangerous consequences for the United States.

The dollar’s role as the world’s primary reserve currency is the foundation of America’s global leadership.

Dollarization gives the United States outsized influence in shaping international financial policy and forces the global community to adapt to the economic decisions made in Washington – rather than the other way around.

The BRICS bloc of non-Western nations expanded its membership to six countries, many of which – from Iran to Saudi Arabia – are the world’s largest oil producers. Courtesy of Pixabay External

Most importantly, at a time of unprecedented global conflict, a reduction in the dollar’s importance would allow rogue states like Iran and Russia to become immune to sanctions in response to geopolitical misbehavior.

A weakening of the dollar would also have serious consequences here.

Lower demand for the currency could make exports cheaper, but would also reduce the dollar’s purchasing power and undermine confidence in its stability.

The resulting higher interest rates and inflation would hurt the stock market and make borrowing to finance our massive federal deficit much more difficult.

Russian President Vladimir Putin attends the recent BRICS summit in South Africa, where the bloc of non-Western nations expanded its membership base and strengthened its goal of “de-dollarizing” the global economy.MIKHAEL KLIMENTYEV/SPUTNIK/KREMLIN POOL/EPA-EFE/Shutterstock

As the BRICS summit made clear, the bloc’s influence on the oil market has never been greater.

This has given them unprecedented power to finally replace the dollar with their own domestic currencies in global energy markets.

Take a close look at the selective approach the Alliance has used to expand its membership.

Although the bloc did not provide details on specific eligibility criteria, the selection is clearly energy-centric.

Saudi Arabia’s oil fields continue to power global transportation and industry, but are also a key component of non-Western efforts to shift the balance of global economic power away from Washington. AFP via Getty Images

Only six of more than 40 applicant countries were accepted this year – large economies such as Turkey and Indonesia were conspicuously left out.

The anti-Western alliance now includes six of the world’s largest oil producers: Saudi Arabia, Russia, China, Brazil, Iran and the United Arab Emirates.

It is also home to two of the world’s largest oil importers – China and India.

The latter pair – Asia’s largest and third-largest economies, respectively – imports more than 40% of the world’s crude oil, according to data from Kpler, a commodity market analysis firm.

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Although 90% of oil trade is currently conducted in dollars, more and more are also transacted in Chinese yuan and Russian rubles.

For example, according to Reuters, India has started paying for Russian oil imports in yuan, and China also started paying Russia for the majority of its energy imports with its yuan in the first quarter of this year.

Saudi Arabia may be new to the BRICS, but it is already working with Russia to reduce oil production, which has caused oil prices to hit a 10-month high this month.

These cuts could lead to a “significant supply shortage” for the rest of the year, keeping gas prices high and fueling inflation, according to a recent report from the International Energy Agency.

The remarkable thing about the BRICS newcomers is that many are authoritarian regimes that are very familiar with the power of US sanctions.

Iran, of course, fought with them for years.

The Saudis – despite being a key US ally – are keen to avoid the “consequences” that Biden called for in October after OPEC+ announced those big production cuts.

Back in 2020, Biden also threatened to make the kingdom a “pariah” because of the murder of Saudi journalist Jamal Khashoggi.

Of course, economics is not the primary driver of decision-making by foreign autocrats like those who rule Russia, China and Iran.

Maintaining power, suppressing civil liberties and ensuring regime stability are their greatest motives.

Although 90% of global oil trade is conducted in dollars, more and more nations are exchanging the dollar for Chinese yuan or Russian ruble. EPA

By excluding Washington from trade and diplomacy, BRICS membership allows rogue states to upend our ability to “weaponize” the dollar as a tool to punish villains like Putin.

The United States has been imposing sanctions instead of military intervention against authoritarian regimes such as Iran, North Korea and now Russia for decades.

For example, the White House seized $600 billion worth of Russian assets after the invasion of Ukraine.

Biden also removed Russia from SWIFT, the international money transfer system, sending shockwaves through non-Western countries that faced the wrath of the White House.

But sanctions, no matter how severe, have proven ineffective. China and India – neither of which have yet condemned Russia for its invasion of Ukraine – have kept Moscow’s energy revenue flowing, which has helped finance Putin’s war machine and underscored the power of BRICS cooperation.

Saudi Crown Prince Mohammed bin Salman has been at the forefront of curbing his country’s oil production, which has helped send oil prices to their highest in 10 months. POOL/AFP via Getty Images

The BRICS countries already have a strong presence throughout the global economy.

With a total population of more than 3 billion people and 31.5% of global GDP, they are a formidable challenger to the G7 bloc of the world’s largest economic superpowers.

The G-7’s share of global GDP, for example, is currently 30% and is expected to fall to 27.95% in 2027, according to a study by Statista.

The dominance of the dollar has led many non-Western nations to join forces and develop a counterweight to Western economic hegemony.

Tired of Washington using the greenback as a geopolitical tool rather than an economic one, the BRICS countries have finally developed their own economic warfare plan.

And they can turn it against us at any time now.

Rebekah Koffler is president of Doctrine & Strategy Consulting, a former DIA intelligence officer and author of “Putin’s Playbook: Russia’s Secret Plan to Defeat America.”

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