Abdelmadjid Tebboune, the Algerian President is currently on a state visit to Russia, that is expected to culminate in the signing of an “Expanded Strategic Partnership” between the two countries. Algiers has been showing an interest in working more closely with Moscow and other leading non-Western players, and has confirmed its readiness to join the BRICS group later this year. Algeria could become Russia’s outpost in North Africa and a partner in the global gas market.
In terms of market size, Algeria has the tenth-largest proven natural gas reserves globally, is the world’s fourth-largest gas exporter, and has the world’s third-largest untapped shale gas resources. It also ranks sixteenth in proven oil reserves and exports about 60% of its total energy production.
Stanislav Mitrakhovich, of Russia’s Financial University and the National Energy Security Fund, said that “Algeria is one of the largest gas suppliers to the EU, and European politicians have been trying to convince it to increase gas supplies. However, domestic consumption in Algeria is also growing and increased production demands large-scale investments. Algeria will increase LNG [liquified natural gas] supplies but the situation is more complicated with pipeline exports:
Algeria is not happy with Spain’s position in the Western Sahara conflict, where Madrid supports Morocco. So, the gas pipeline from Algeria to Spain via Morocco has ceased to function as an export route to Europe; only an underwater pipeline from Algeria to Europe remains.
Mitrakhovich added that “Under current conditions, Russia could offer Algeria, if not complete market sharing, at least assistance in coordinating issues concerning priority export destinations and counteracting attempts by Western countries to introduce gas price limit mechanisms, as well as in handling discrimination by European politicians against gas as an energy resource. Russia also has proposals for Algeria on nuclear energy and agriculture.”
Current Russia-Algeria bilateral trade is worth about US$1.65 billion with the vast majority of that being Russian exports to Algeria, although that, in light of enhanced energy cooperation, may change. Currently, Russian exports have focused on Navigation Equipment, Soybean Oil and Broadcasting Accessories. Algerian exports to Russia are commonly Fruits and Dried Fruits. The country is also likely to see an expanded volume of Russian tourists. This current industrial make- up though can be expected to change significantly due to the energy sectoral commonalities.
Algeria Snapshot
GDP: USD168 billion
GDP Per Capita: USD3,700
2023 Projected Growth Rate: 2.3%
Population: 45 million
Algeria is a member of OPEC, which also includes Congo, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the UAE and Venezuela, as well as the Arab Trade Zone which also includes Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, the UAE and Yemen.
Algeria is also a member of the African Continental Free Trade Agreement (AfCFTA) which reduces tariffs to zero on 98% of all intra-African trade. Algeria’s largest trade partners are Italy, France, Spain, the United States and Brazil, although it has shown a recent push to be more involved in non-Western markets – which this new, expanded strategic partnership with Russia is partially designed to deliver.
Source: Russia Briefing
