meed-logo

line1 line2 line3
SIGN IN / REGISTER

Brics tilts balance of regional interests

27 September 2023

 

With the extension of invitations to Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the UAE to join the Brics group of major emerging economies – and the acceptance by the UAE – Middle East interests are represented within the bloc for the first time and could end up comprising a third of its total membership.

This potential shift in the geopolitical reorientation of Brics reflects two interests for the group. The first of these is the strategic nature of the Middle East, both in terms of energy and logistics. The second is the key role that Saudi Arabia and the UAE could play in challenging the dollar.

None of this is necessarily a hard sell. As it stands, Egypt, Saudi Arabia and the UAE have reserved, business-like and occasionally testy relations with the US and the EU, while Iran is alienated by sanctions. All four Middle East countries meanwhile have strong and expanding trade relations with China and India.

From the perspective of China, India and Russia, the Middle Eastern invitees to Brics are ripe targets for being drawn further away from the sphere of Western influence. Brics, as a collective of Brazil, Russia, India, China and South Africa, is already a counter of sorts to the G7 and aims to level the global playing field. 

The addition of six new members stands to not only increase the bloc’s leverage, but, in Saudi Arabia and the UAE, aims to add two countries that are also ambitious about raising their stature on the global stage.

Strategic partnership

In terms of economics, the proposed expansion of the Brics membership would increase the size of the bloc by about a tenth, adding markets responsible for $2.6tn in GDP and populated by 409 million people, as of 2021, according to the World Bank. This builds on an existing GDP of $27.3tn – $17.7tn of it from China alone – and a population of 3.6 billion people.

Of the invited countries, Saudi Arabia represents the largest single potential net gain for the group, with its economy valued at about twice that of existing member South Africa.

Trade ties are already extensive within the group. China and India are top trade partners for Iran, Saudi Arabia and the UAE, so the prospective new Brics membership is building upon a framework of already highly interconnected and integrated economic relationships.

China is the single-most important trading partner of Saudi Arabia, accounting for 17 per cent of the kingdom’s foreign trade, while India accounts for about 9 per cent. The UAE and Egypt are also top trading partners for the kingdom. 

Overall, this means that the new prospective line-up of the Brics bloc could potentially represent a sizeable proportion of Saudi Arabia’s total trade moving forward.

China, India and Saudi Arabia are similarly two of the UAE’s top trade partners, while China, India and the UAE are all among Iran’s top trade partners. China and Saudi Arabia are likewise major trade partners for Egypt.

Though the expansion may represent a fractional upscaling in terms of market volume and value, the broadening of the bloc to strategic players in the Middle East could have an outsized potential to strengthen its member states’ global influence and collective bargaining.

Not least is the addition of three key members of oil producers’ group Opec – Iran, Saudi Arabia and the UAE – and observer state Egypt, up from the single Opec+ party Russia. 

This stands to bring key energy producers into yet closer economic partnership with China and India, both major energy consumers. It could also be key to progressing the Brics ambition of loosening the hold of the dollar by transitioning major bilateral energy transactions conducted in dollars into other currencies.

Next steps

The UAE’s quick acceptance of the Brics invitation shows its enthusiasm for strategic advancement and the potential leverage that a more empowered bloc could represent. The country will nevertheless, like India, need to carefully balance its role in the group with its existing US partnership – perhaps more so than any of the other invitees.

The UAE’s agreements with China and India to trade in local currencies is already a major win for the bloc in its efforts to reduce reliance on the US dollar. The more ambitious proposal for a common Brics currency to counter dollar fluctuations remains complex and uncertain.

The likes of Saudi Arabia and the UAE do, however, have the financial clout and expertise to potentially place the Brics-established New Development Bank on firmer economic footing, improve its project management and help establish it as a more credible counterpart to the likes of the Washington-based IMF and the World Bank.

Much will hinge on which of the remaining invitees ultimately choose to join the bloc. 

Iran and Egypt are expected to swiftly follow the UAE in accepting. Saudi Arabia is still carefully weighing the invitation, cautious of the chilling effect that throwing in its lot too clearly with China could have on its US relationship. 

For both Saudi Arabia and the UAE to join Brics would be a major coup for the bloc and a momentous shift in global politics.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11160270/main.gif
John Bambridge

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Iraq’s first LNG terminal to be completed in June

    27 April 2026

    Iraq’s first liquefied natural gas (LNG) import terminal is expected to be completed in early June, according to the country’s Ministry of Electricity.

    The terminal, which has an estimated investment value of $450m, is being developed at the Port of Khor Al-Zubair and will have a capacity of 750 million standard cubic feet a day (cf/d).

    Ministry spokesperson Ahmed Mousa told the Iraqi News Agency that “work is proceeding at an accelerated pace to complete the LNG platform”, noting that “the government has set 1 June as the date for finishing the project”.

    In October last year, US-based Excelerate Energy signed a commercial agreement with a subsidiary of Iraq’s Ministry of Electricity to develop the floating LNG terminal.

    The contract was signed at the office of Iraq’s Prime Minister Mohammed Shia Al-Sudani during a ceremony attended by senior officials from both countries, including the US deputy secretary of energy James Danly.

    The contract included a five-year agreement for regasification services and LNG supply with extension options, featuring a minimum contracted offtake of 250 million cf/d.

    Ahmed Mousa said that “under the contract, the company is responsible for completing the facility as well as securing the agreed gas quantities from any source, in line with the specified terms”.

    He added: “Work is continuing according to the planned timelines to complete the project on schedule, as part of the Ministry of Electricity’s plans to keep pace with peak summer loads.”

    Although Iraq is Opec’s second-largest oil producer after Saudi Arabia, it is a net natural gas importer because its lack of infrastructure investment has meant that, until 2023, it flared roughly half of the estimated 3.12 billion cf/d of gas produced in association with crude oil.

    Iraq’s reliance on flaring associated gas instead of gathering and processing it has prevented the country from fully realising its potential as a gas producer and forced the Iraqi government to rely on costly gas and electricity imports from Iran.

    Recently, Iraq’s oil and gas sector has been disrupted by fallout from the US and Israel’s attack on Iran on 28 February and the subsequent regional conflict.

    Over recent weeks, Iraq’s oil exports have collapsed by about 80% amid problems shipping crude through the Strait of Hormuz.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16577746/main.jpg
    Wil Crisp
  • Iraqi LNG import terminal raises questions about energy strategy

    27 April 2026

    Commentary
    Wil Crisp
    Oil & gas reporter

    Iraq’s first LNG import terminal is set to come online in early June, at a time when global LNG prices are likely to remain close to their highest levels in more than three years.

    The disruption to global oil and gas exports in the wake of the US and Israel’s attack on Iran on 28 February led to LNG prices soaring, with natural gas prices in Asia and Europe rising to their highest levels since January 2023 during March.

    So far, there has been little progress towards a diplomatic or military solution to reopen the Strait of Hormuz, and most analysts do not forecast significant price declines in the near term.

    On 24 April, the International Energy Agency (IEA) said that the combined effect of short-term supply losses and slower capacity growth could result in a cumulative loss of around 120 billion cubic metres of LNG supply between 2026 and 2030.

    While the IEA expects new liquefaction projects in other regions to offset these losses over time, it still believes the crisis will lead to prolonged tight market conditions through 2026 and 2027.

    This means that Iraq will likely have to pay elevated prices for imported LNG for some time to come – if it can receive shipments at all.

    The port of Khor Al-Zubair is located in the Arabian Gulf, and LNG shipments from the US or Australia would need to pass through the Strait of Hormuz before reaching the terminal.

    This will only be possible if a solution is found to the ongoing blockade of the shipping route.

    Investment debate

    Iraq’s project to develop a floating LNG terminal is estimated to cost $450m, and many in Iraq may question whether this was the best use of these funds.

    While it may have been difficult for Iraqi policymakers to foresee the attack by the US and Israel on Iran and its impact on LNG markets, Iraq had several strong options to enhance domestic energy security rather than turning to LNG imports.

    The most obvious of these was investing in infrastructure to enable it to utilise its domestic gas reserves.

    According to the World Bank’s 2025 Global Gas Flaring Tracker Report, in 2024, Iraq burned off more unused gas than any other country, except Russia and Iran, which ranked first and second, respectively.

    That year, an estimated total of more than 18 billion cubic metres of natural gas was flared in Iraq due to a lack of infrastructure to properly capture and process it.

    It is highly likely that projects to gather and process this gas would have been more reliable and cost-effective than investing in a new floating LNG terminal, which increases the country’s exposure to global LNG price fluctuations and shipping disruptions.

    Other options could have included developing domestic gas fields or investing in solar and battery storage projects, which have become increasingly affordable in recent years.

    The cost of solar panels has fallen by more than 95% over the past decade.

    Power shortfall

    As things stand, Iraq is likely to face severe electricity shortages this summer.

    On 21 April, Iraq’s Ministry of Electricity said it plans to produce 30,000MW this summer, well short of the predicted peak demand of around 55,000MW.

    Ahmed Musa, a spokesperson for the Electricity Ministry, told the state-run Iraqi News Agency that the shortfall will result in planned outages across the country.

    He also said that even meeting the 30,000MW target is contingent on sufficient gas supplies.

    If Iraq experiences the same level of power outages as last year – or worse – many are likely to view the $450m spent on an LNG import terminal as a waste of money and an expensive symbol of poor planning.

    Power cuts this summer could stoke unrest at a time that is already politically precarious due to the ongoing regional conflict.

    In recent years, electricity shortages have repeatedly fuelled protests in Iraq during the summer months, particularly in Basra, where blackouts and poor public services have driven people to take to the streets.

    If the Strait of Hormuz does not reopen soon, Iraq’s economic crisis will deepen, and electricity shortages are likely to further undermine the country’s stability.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16577743/main.jpg
    Wil Crisp
  • Kuwait approves Doha desalination plant award

    27 April 2026

    Kuwait’s Central Agency for Public Tenders has approved the recommendation of the Ministry of Electricity & Water to award a KD114.28m ($371.5m) contract to supply, install, operate and maintain the second phase of the Doha seawater reverse osmosis (SWRO) desalination plant.

    A joint venture of Kuwait-based Heavy Engineering Industries & Shipbuilding Company (Heisco) and India’s VA Tech Wabag has been selected for the project, with the award understood to be pending final approval from the Audit Bureau.

    The project will deliver a production capacity of about 60 million imperial gallons a day (MIGD) and will include the desalination plant with full reverse osmosis trains, pre- and post-treatment systems, recarbonation equipment, booster pumps, and safety and filtration systems.

    The total project duration is 96 months. The Doha SWRO desalination plant is part of Kuwait’s broader programme to expand water production capacity and reduce reliance on thermal desalination methods.

    MEED previously reported that the Heisco/Wabag joint venture submitted the lowest bid. Bidders and prices included:

    • Heavy Engineering Industries & Shipbuilding / Wabag: $373.2m
    • Cox Water (Spain): $538.1m
    • Orascom Construction (Egypt): $568.4m

    In April 2025, MEED reported that Kuwait had retendered the contract for the facility after the ministry cancelled the initial tender in June 2024.

    The Ministry of Electricity & Water awarded South Korea’s Doosan Heavy Industries & Construction – now known as Doosan Enerbility – a $422m contract in May 2016 to build the 60 MIGD Doha 1 SWRO plant.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16577722/main.jpg
    Mark Dowdall
  • Firms prepare bids for 250MW Airtrunk data centre

    27 April 2026

     

    Contractors are preparing to submit commercial offers by 4 May for a contract to build a 250MW data centre in Riyadh.

    The project is being co-developed by Australian firm AirTrunk in collaboration with Saudi Arabia’s artificial intelligence (AI) infrastructure company Humain, which is owned by the Public Investment Fund (PIF).

    The bidders include:

    • El-Seif Engineering Contracting / Larsen & Toubro (local/India)
    • FCC / Alfanar Projects (Spain/local)
    • Albawani / Orascom (local/Egypt)
    • Nesma & Partners (local
    • James L Williams (UAE)
    • Alec (UAE)

    In October last year, AirTrunk and Humain announced a $3bn partnership to build data centres in Saudi Arabia, marking AirTrunk’s first move into the region.

    The firms said they would, along with AirTrunk investor Blackstone, “develop a long-term strategic partnership focused on financing, developing and operating next-generation data centres and AI infrastructure across the kingdom”.

    This was followed by Humain signing a $1.2bn financing agreement with the state-backed National Infrastructure Fund to support the expansion of AI and digital infrastructure projects in Saudi Arabia. The agreement was signed in January on the sidelines of the World Economic Forum in Davos, Switzerland.

    Humain said the deal will support its plan to develop up to 250MW of hyperscale AI data centre capacity in the kingdom.

    According to a joint statement, the data centres will use graphics processing units for AI training and inference, serving Humain’s customers locally, regionally and globally.

    The National Infrastructure Fund and Humain will also explore launching an AI data centre investment platform, with the two organisations acting as anchor investors to enable local and international institutional investors to back the scale-up of Humain’s AI programme.

    The National Infrastructure Fund is Saudi Arabia’s lead development financing partner for infrastructure and operates under the supervision of the National Development Fund.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16577720/main.jpg
    Yasir Iqbal
  • Diriyah confirms $490m museum construction contract

    27 April 2026

    Saudi gigaproject developer Diriyah Company has formally announced the award of a SR1.84bn ($490m) construction contract for its Saudi Arabia Museum of Contemporary Art (SAMoCA) within the Diriyah development in Riyadh.

    The contract has been awarded to a consortium comprising Egyptian contractor Hassan Allam Construction and Saudi Arabia’s Albawani.

    In February, MEED exclusively reported that the contractors were preparing to start construction work on the project. MEED understands Diriyah Company awarded the contract to the consortium in December last year.

    The announcement follows Diriyah Company’s award of an estimated SR2.5bn ($666m) contract to build the Pendry superblock package in the DG2 area.

    The Pendry superblock includes the construction of the Pendry Hotel alongside residential and commercial assets. The package will cover 75,365 square metres and is located in the northwestern district of the DG2 area.

    In February, Diriyah Company also awarded a SR717m ($192m) contract for the construction of the One Hotel, located in the Diriyah Two area of the masterplan, with a gross floor area of more than 31,000 sq m.

    The Diriyah masterplan envisages the city as a cultural and lifestyle tourism destination. Located northwest of Riyadh city centre, it will span 14 square kilometres and combine 300 years of history, culture and heritage with hospitality facilities.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16577413/main.jpg
    Yasir Iqbal