Heraldviews with Agency report
The BRICS group's campaign to replace the US dollar with local currencies in oil transactions is meeting stiff resistance from both member and prospective member nations, including Nigeria and Saudi Arabia.
Despite Saudi Arabia's
announcement last year that it would accept local currencies for oil payments,
the vast majority of its crude exports continue to be settled in US dollars.
Only a handful of non-dollar transactions have been completed, according to
industry sources.
In Nigeria, petroleum marketers
have strongly opposed a government proposal to implement naira-denominated
crude oil transactions. Olufemi Adewole, Executive Secretary of the Depot and
Petroleum Products Marketers Association of Nigeria (DAPPMAN), warned the
policy could destabilize the country's foreign exchange market.
"The naira-for-crude
framework presents significant risks to Nigeria's foreign exchange stability
and could deter foreign direct investment," Adewole told the BBC.
"The global oil market operates in dollars because of its stability.
Moving away from this could alienate trade partners who rely on the dollar's
predictability."
The resistance highlights the
challenges facing BRICS' de-dollarization ambitions. Even potential new members
like Nigeria, which had expressed interest in joining the bloc, remain
dependent on dollar-based oil trade.
Energy analysts note that about
80% of global oil trade is still conducted in US dollars, according to IMF
data. "No alternative currency currently offers the same combination of
liquidity, stability and universal acceptance for commodity trading," said
a London-based oil market specialist.
The developments suggest many
developing nations are quietly stepping back from BRICS' currency agenda,
fearing potential volatility in their foreign exchange reserves and trade
relationships.
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