Iran Applies to Join China and Russia in BRICS Club

A delegate walks past a BRICS logo ahead of the 10th BRICS Summit, in Sandton, South Africa, July 24, 2018. (Reuters)
A delegate walks past a BRICS logo ahead of the 10th BRICS Summit, in Sandton, South Africa, July 24, 2018. (Reuters)
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Iran Applies to Join China and Russia in BRICS Club

A delegate walks past a BRICS logo ahead of the 10th BRICS Summit, in Sandton, South Africa, July 24, 2018. (Reuters)
A delegate walks past a BRICS logo ahead of the 10th BRICS Summit, in Sandton, South Africa, July 24, 2018. (Reuters)

Iran, which holds the world's second largest gas reserves, has applied to join the BRICS group of Brazil, Russia, India, China and South Africa that Beijing and Moscow cast as a powerful emerging market alternative to the West.

The term BRIC was coined by Goldman Sachs economist Jim O’Neill in 2001 to describe the startling rise of Brazil, Russia, India, China. The BRIC powers had their first summit in 2009 in Russia. South Africa joined in 2010.

Iran's membership in the BRICS group "would result in added values for both sides", Iran's Foreign Ministry spokesperson said. Russia said Argentina had also applied to join.

Russia cast the applications as evidence that the West, led by the United States, was failing to isolate Moscow after the invasion of Ukraine.

"While the White House was thinking about what else to turn off in the world, ban or spoil, Argentina and Iran applied to join the BRICS," Russian Foreign Ministry spokeswoman Maria Zakharova said.

Argentine officials could not be reached for immediate comment but President Alberto Fernandez, currently in Europe, has in recent days reiterated his desire for Argentina to join BRICS.

China has by far the largest economy in the BRICS grouping, accounting for more than 70% of the group's collective $27.5 trillion economic might. India accounts for about 13%, with Russia and Brazil each accounting for about 7%, according to IMF data.

BRICS account for more than 40% of the world's population and about 26% of the global economy.

Chinese power

Chinese President Xi Jinping joined Russian President Vladimir Putin and other BRICS leaders for a virtual summit last week.

Xi criticized "the abuse" of international sanctions, while Putin scolded the West for fomenting global crisis, with both leaders calling for greater BRICS cooperation.

Putin has said relations with China are the best they have ever been and touts a strategic partnership with China aimed at countering US influence.

US President Joe Biden has said the West is locked in a battle with autocratic governments such as China and Russia.

The United States and European powers blame Putin's decision to invade Ukraine as the reason relations with the West have sunk to the lowest level since the 1962 Cuban Missile Crisis -- including the severest sanctions in modern history.

But Putin says the West wants to destroy Russia, that the economic sanctions are akin to a declaration of economic war and that Russia will build ties with other powers such as China and India.

Putin, who casts the Ukraine war as a "special military operation", blames the United States for humiliating Russia in the aftermath of the 1991 fall of the Soviet Union and threatening Moscow by enlarging the NATO military alliance.

Russia sent troops into Ukraine on Feb. 24 to degrade its southern neighbor's military capabilities, root out people it called dangerous nationalists and defend the Russian-speakers of two eastern Ukrainian regions.

Ukraine says Russia has launched an imperial-style land grab and will never surrender its territory to Russia.



Saudi Aramco: Oil Refining Has Been Underinvested

FILE PHOTO: Saudi Aramco logo and stock graph are seen through a magnifier displayed in this illustration taken September 4, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: Saudi Aramco logo and stock graph are seen through a magnifier displayed in this illustration taken September 4, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
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Saudi Aramco: Oil Refining Has Been Underinvested

FILE PHOTO: Saudi Aramco logo and stock graph are seen through a magnifier displayed in this illustration taken September 4, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: Saudi Aramco logo and stock graph are seen through a magnifier displayed in this illustration taken September 4, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

The current oil supply crisis shows there is underinvestment in oil refining as demand holds resilient, Saudi state-owned Aramco's vice president of market analysis and sustainability, Musaab Al Mulla, said on Tuesday.

Around 3 ⁠million barrels per ⁠day of refining capacity closed between 2020 and 2023, Al Mulla said at the S&P Global Energy Middle East ⁠Petroleum and Gas Conference in London.

"Now we realize if you have those refineries you may have definitely mitigated the impacts of the crisis today," he said.

The war in Iran, attacks on energy infrastructure and ⁠Iran's effective ⁠closure of the Strait of Hormuz followed by a US naval blockade, have removed around 14 million bpd of oil supply from Middle East producers to the global market.


OECD Cuts 2026 Global Growth Forecasts Over Mideast War Fallout

A drone view of vessels anchored in the Strait of Hormuz as seen from Musandam, Oman, June 3, 2026. (Reuters)
A drone view of vessels anchored in the Strait of Hormuz as seen from Musandam, Oman, June 3, 2026. (Reuters)
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OECD Cuts 2026 Global Growth Forecasts Over Mideast War Fallout

A drone view of vessels anchored in the Strait of Hormuz as seen from Musandam, Oman, June 3, 2026. (Reuters)
A drone view of vessels anchored in the Strait of Hormuz as seen from Musandam, Oman, June 3, 2026. (Reuters)

The war in the Middle East has dented economic growth prospects worldwide, with a more severe shock likely if no effective ceasefire is agreed before 2027, the OECD warned Wednesday.

Global economic growth is now forecast to slip to 2.8 percent for 2026 if Gulf exports of oil and gas return to pre-conflict levels in the third quarter, the group of 38 industrialized countries said in its quarterly update.

Previously the OECD had forecast full-year global growth of 2.9 percent.

But if the Middle East war continues into next year, however, global growth could slow to 2.1 percent, the OECD said -- well below the average annual growth of 3.4 percent seen from 2013 to 2019, before the Covid pandemic.

"The longer the disruptions last, the larger the economic and social costs become," the group's chief economist Stefano Scarpetta said in the report.

Many countries would risk falling into recession, he noted, and a drop in investment spending -- "including in energy-intensive AI" -- would likely push up unemployment.

Sustained high prices for energy as well as fertilizer and other key products from hydrocarbon production in the Gulf would weigh especially hard on developing countries that have "higher shares of energy and food in household consumption".

Even if the war sparked by US and Israeli strikes on Iran in late February ends in the coming weeks, the OECD forecast global inflation rising to 4.0 percent this year from 3.4 percent in 2025.

In this "time-limited disruption scenario", the group expects US growth to slow to 2.0 percent this year and 1.8 percent in 2027, after growing 2.1 percent last year.

In the eurozone, where many countries are highly dependent on energy imports, GDP growth will slump to 0.8 percent this year after 1.4 percent last year, assuming a Mideast ceasefire is secured in the coming weeks.


Saudi Non-oil Private Sector Activity Hits 3-month High in May

The Saudi capital, Riyadh (Reuters)
The Saudi capital, Riyadh (Reuters)
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Saudi Non-oil Private Sector Activity Hits 3-month High in May

The Saudi capital, Riyadh (Reuters)
The Saudi capital, Riyadh (Reuters)

Saudi Arabia's non-oil private sector expanded at the fastest pace in three months in May as domestic demand improved and supply chains stabilized, while business optimism remained subdued amid conflict in the region, a survey showed on Wednesday.

The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers' Index, compiled by S&P Global, rose to 52.8 in May from 51.5 in April. The 50 mark separates growth from contraction, Reuters reported.

Output accelerated at the ⁠fastest pace in ⁠three months after March's downturn following the start of the Iran war, as firms cited normalizing working conditions, revived contracts and stronger local demand.

Export sales fell for a third straight month, hit by shipping disruption, higher freight and fuel costs, geopolitical tensions and stronger competition. The pace of decline eased only modestly from April's survey-record contraction.

However, supply chains improved, with suppliers' delivery times shortening for the first time in three months as ⁠firms relied ⁠more on local vendors. Backlogs of work rose for an 11th consecutive month, albeit moderately.

“Overall, the latest PMI reading supports the expectation that Saudi Arabia’s non-oil economy will continue its upward trend during the remainder of 2026," said Naif Al-Ghaith, Riyad Bank's chief economist.