The economic newspaper Les Echos reported that while other North African countries fear the repercussions of rising energy prices on their budgets and consumer prices due to the war linked to Iran, Algeria and Libya may benefit from this increase, as both countries export significant quantities of oil and gas to international markets.
The newspaper noted that tensions in the region, including the disruption of navigation in the Strait of Hormuz and the decline in production in the Gulf states, have pushed the price of Brent crude to above $100 a barrel, a level about 40% higher than the price adopted by Algeria in its 2026 budget, estimated at about $70 a barrel.
The price of European reference gas in the Dutch market (TTF) has also risen to around 50 euros per megawatt-hour, compared to around 30 euros before the outbreak of the conflict.
Les Echos noted that the European Union is the main destination for Algerian gas, which arrives via liquefied natural gas or through three pipelines.
The newspaper quoted energy political economy researcher Nassima Ouhab Al-Athamneh as saying that rising global energy prices may be a temporary opportunity for Algeria and Libya, but she stressed that judging the size of the gains depends on the duration of the war and the direction of prices in the future.
“Lezico” adds that this scenario is similar to what happened in 2022 after the Russian invasion of Ukraine, when the average price of Brent crude reached about $101, and the price of European gas rose to 133 euros per megawatt-hour.
Thanks to that increase, Algeria’s oil and gas revenues jumped by about 75% to reach about $60 billion that year, despite a slight decrease in export volumes.
However, the French economic newspaper also pointed out that these gains were not without negative consequences, as they led to a rise in inflation to around 9% due to increased prices for imported goods, particularly food. Furthermore, reliance on oil revenues could delay economic diversification projects.
Hydrocarbon exports also constitute about 90% of Algeria’s exports and nearly 60% of its budget revenues, making the rise in global prices an important factor in mitigating the expected budget deficit for 2026, especially after the approval of a record budget of $135 billion, about a third of which goes to public sector wages.
However, L’Economiste continues, exports are not expected to increase significantly, as Algeria’s oil and gas production is gradually declining, while domestic demand is rising due to a growing population of approximately 47 million. Furthermore, the country is committed to its OPEC production quotas and has only announced a slight increase of 6,000 barrels per day, bringing its total output to around 977,000 barrels per day.
In Libya, Africa’s second-largest oil producer, the country is more dependent on the energy sector, with hydrocarbons accounting for about 95% of its exports and 90% of its budget revenues.
However, the price increase in 2022 was not clearly reflected in official revenues, which remained at around $22 billion, due to production falling by almost half as a result of the closure of a number of oil fields and ports during a political conflict between rival Libyan parties, the French newspaper recalls.
Most of the oil facilities are located in the east of the country, which is under the control of Field Marshal Khalifa Haftar's forces, and these facilities are often used as leverage in political conflicts within Libya.
Tags:
asiawest
