BRICS: China's subtle strategy to disrupt the global economic order

Recent data shows that China is strategically bolstering its oil stocks. For several months, the Middle Kingdom has been taking advantage of its partnership with Russia for this purpose. Some believe that this is a way for China to expand its influence within the BRICS.

The Enhanced Oil Hoarding by the Chinese BRICS Member!

China, a key member of the BRICS, is taking advantage of the fall in crude oil prices to strategically accumulate additional oil stocks. This is indicated by consistent sources, which suggest the country is benefiting from sanctions imposed on Russia.

Due to these sanctions, China has been able to purchase cheap crude oil from its BRICS counterpart, forced to sell its resources at reduced rates. A movement that began in October 2023 and has favored China.

Indeed, this maneuver has led to the Chinese yuan becoming the most traded currency in Russia for trade-related activities. This, with transactional benefits for the Chinese giant, which has accumulated a substantial six-month stockpile thanks to increased purchases of Russian oil.

While China notably refrains from making its strategic oil stocks public, questions are emerging. Some analysts suspect this influential BRICS member of practicing some form of strategic hoarding. As proof, in December 2023 alone, China managed to accumulate an astonishing 1.39 million barrels of oil per day. A significant escalation compared to the 20,000 barrels per day stocked in November.

BRICS: China Stockpiling 1.39 Million Barrels of Oil Every Dayhttps://t.co/FFFkcJWSsVhttps://t.co/zG0IJMaLu4

— crimsonbearz (@crimsonbearz) January 23, 2024

A Chinese Approach That’s Far from Trivial?

Throughout 2023, China has been accumulating an average of 760,000 barrels of crude oil per day. According to an oil trader, China is strategically obtaining oil worldwide, except in the United States, where freight rates are exorbitant.

This choice is no coincidence since with the rise in oil prices and the strengthening of demand, China has the opportunity to exploit its strategic oil reserves by selling them to other countries, thereby realizing substantial profits.

But at its core, this approach seems strategically linked to the BRICS’s desire to move away from the dollar. Indeed, some analysts suggest that China, along with other BRICS members, could exert influence in this direction.

BRICS could compel countries to settle oil payments in Chinese yuan rather than US dollars. This could allow the Middle Kingdom to position itself as a key player in the global oil dynamic. Not to mention the country has been suspected of wanting to strengthen its role within the BRICS.

As a reminder, the alliance is actively working on launching a common currency. A currency whose digital possibilities, notably in crypto, have been discussed over the past months.