Saudi Arabia’s Move to Join BRICS Grants it Greater Economic Expansion

A photo of the new BRICS New Development Bank (NDB) at its headquarters in Shanghai, China. (Reuters)
A photo of the new BRICS New Development Bank (NDB) at its headquarters in Shanghai, China. (Reuters)
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Saudi Arabia’s Move to Join BRICS Grants it Greater Economic Expansion

A photo of the new BRICS New Development Bank (NDB) at its headquarters in Shanghai, China. (Reuters)
A photo of the new BRICS New Development Bank (NDB) at its headquarters in Shanghai, China. (Reuters)

Economic analysts have emphasized that Saudi Arabia’s expected move to join the BRICS group as an observer will grant the Kingdom the ability to participate in some of its economic activities.

The group is expected to meet in August.

This move is also expected to strengthen Saudi Arabia’s trade and economic relationships while reaffirming its commitment to global economic openness and the prudent management of economic ties.

Dr. Mohammed Makni, a finance and investment professor at Imam Mohammad Ibn Saud Islamic University in Saudi Arabia, told Asharq Al-Awsat that since its inception, the BRICS group has sought to shift economic power from a single to multiple directions.

The bloc is significant for comprising around 41% of the world's population and 29% of the world’s land area. Additionally, its members are part of the G20, representing the world’s largest 20 growing economies.

Makni further added that Saudi Arabia’s inclusion will open new paths and significant opportunities for the Kingdom’s economy and the Gulf markets, leading to expansion and increased global economic stability.

Saudi Arabia will also play a crucial role among the group’s nations, particularly in the trade of oil and gas, which constitutes 30% of the Kingdom's exports to global markets.

Makni also added that Saudi Arabia is open to all, and its policies are not limited to a Western-oriented approach.

He pointed out that the country had joined the Shanghai Cooperation Organization for Economic and Security Cooperation in March 2022.

This move, Makni emphasized, will not affect the strong relations between Riyadh and Washington, as well as other Western countries.

It serves to affirm the strength and resilience of the Saudi economy and the Kingdom’s capability and wisdom in managing its relationships with various nations while maintaining a balance of interests to achieve the strategic goals of Vision 2030.

Moreover, Makni emphasized that this membership will infuse a new vitality into the economies of the member states amid the ongoing global economic crises and reshaping of economic powers.

It will also create opportunities for the BRICS nations to enter the markets of the Gulf region, especially given the urgent need for the two largest economies in the group, China and India, to access Gulf energy markets in order to sustain growth and move towards global economic leadership.

The BRICS group is a global economic bloc comprising the countries of Brazil, Russia, India, China, and South Africa. BRICS is an acronym derived from the initial letters of these nations’ names.

Currently, South Africa is chairing the group, and it will host the 15th summit of the bloc from August 22 to 24.



Abu Dhabi's XRG Targets Gas, LNG Capacity of 20-25 Million Tons a Year by 2035

Sultan Al Jaber, COP28 President, speaks at the United Nations climate change conference COP29 opening in Baku, Azerbaijan November 11, 2024. REUTERS/Maxim Shemetov/File Photo
Sultan Al Jaber, COP28 President, speaks at the United Nations climate change conference COP29 opening in Baku, Azerbaijan November 11, 2024. REUTERS/Maxim Shemetov/File Photo
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Abu Dhabi's XRG Targets Gas, LNG Capacity of 20-25 Million Tons a Year by 2035

Sultan Al Jaber, COP28 President, speaks at the United Nations climate change conference COP29 opening in Baku, Azerbaijan November 11, 2024. REUTERS/Maxim Shemetov/File Photo
Sultan Al Jaber, COP28 President, speaks at the United Nations climate change conference COP29 opening in Baku, Azerbaijan November 11, 2024. REUTERS/Maxim Shemetov/File Photo

XRG, the international investment arm of Abu Dhabi National Oil Company (ADNOC), is aiming to have a gas and LNG business with a capacity of between 20 million and 25 million metric tons a year by 2035, the company said in a statement on Tuesday.

XRG was set up last year as an investment company focused on lower-carbon energy, gas and chemicals, with assets of more than $80 billion.

On Tuesday, its board, whose members include former BP CEO Bernard Looney and Blackstone's Jon Gray, approved the capacity target and a new five-year business plan.

Board members also supported the assessment of potential gas acquisitions and LNG opportunities in North America, Reuters reported.

ADNOC's current US investments already sit under XRG, and the oil giant's Chief Executive Sultan Al Jaber said in March that XRG would make a significant investment in US natural gas in coming months.

XRG has also changed the name of its low carbon energies platform to Energy Solutions to reflect the full scope of the company's strategy, including energy demand linked to artificial intelligence and the digital economy, a company spokesperson said on Tuesday.

The board "endorsed the company's ambition to create a top three global chemicals platform," XRG said.

ADNOC had agreed in October to buy German chemicals maker Covestro for 14.7 billion euros ($16.73 billion) including debt. Jaber later said it would sit under XRG.