Geopolitics Non-Military Security

Algeria deepens its ties with Moscow. Is it a challenge for the European gas market?

Jerguš Lajoš

On June 14, An Algerian delegation led by President Abdelmadjid Tebboun arrived in Russia following an invitation from Russian President Putin. In addition to the Head of State, the delegation, including executive representatives of several ministries, came to the country of its longstanding partner to participate at the 26th International Economic Forum held in St. Petersburg. The objectives were twofold – to reach out to Russian investors and get them interested in investing in the economic opportunities offered by the North African country and also to make attempts to gain support for Algeria’s admission to the BRICS group.

Algeria and Russia have been economic and strategic partners since the 1950s, with a strong commitment to mutual cooperation and a shared belief in its future development. During the era of the USSR, the Soviet Union provided crucial support to Algeria as it sought independence from French influence. This assistance helped Algeria establish its sovereignty and develop its economy, among other critical areas. Notably, cooperation in the defence industry, including the supply of arms, played a vital role in these processes.

Algeria and Russia have a significant partnership in the trade of military equipment. Approximately 76% of Algeria’s weaponry originates from Russia (USSR). In 2007, the two countries finalized a deal worth $1.9 billion for the acquisition of 49 MiG-29SMT and MiG-29UBT fighter jets, and Algeria also procured a Type 636 submarine from Russia. Algeria’s status as a reliable arms buyer provides leverage in future negotiations. However, there is a possibility that Algeria may choose to diversify its sources of arms suppliers and establish partnerships with other contractors. Since 2002, Algeria has made limited armament purchases from other countries, such as China (7%), Germany (6%), and Italy (3%). Unlike Russia, these countries have also established military equipment production facilities in Algeria. In the long term, diversifying sources would be a safer and more secure solution for Algeria. Nevertheless, experts suggest President Tebboune is unlikely to disrupt the longstanding favourable relations with Eastern European partners. Furthermore, in October of the previous year, the two nations conducted a joint naval exercise in the Mediterranean to enhance their naval interoperability. There were even reports in November 2022 indicating that Algeria was prepared to sign a contract worth $12-17 billion for the supply of weapons and military equipment. However, no official confirmation has been made, and the latest available figures are from 2021, indicating that Algeria spent $3 billion on arms from Russia. Nonetheless, it is expected that the Kremlin, burdened by war expenditures, would welcome trade offers from Algeria. The key question remains whether Russia’s military industry can fulfil foreign demands while simultaneously replacing the increasing losses of military equipment and armaments resulting from the Russian army’s involvement in Ukraine.

Trade cooperation extends to the energy sector as well. Algeria possesses substantial natural gas reserves, ranking as the 10th largest in the world. Given the current circumstances, it has the potential to become a significant gas supplier to Europe. This places Algeria in a sensitive position concerning its partner, Russia, as Moscow faces increasing access restrictions to the European energy market. The two OPEC+ members have now become competitors in the hydrocarbon fuel market as Algeria’s plan to increase gas exports to Europe conflicts with Moscow’s aim to undermine the EU’s efforts to diversify its energy sources. Algeria intends to expand its pipeline network to Europe, specifically through Italy and Spain. However, there are obstacles to overcome, including the substantial infrastructure investments required. The main challenge lies in Algeria’s stance towards Madrid due to Spain’s support for Morocco in the Western Sahara conflict. Algeria firmly opposes Morocco’s occupation of the Western Sahara and responded to Madrid’s decision by closing the gas pipeline from Africa to the Iberian Peninsula. In this situation, Russia could potentially offer support to Algeria in coordinating priority export destinations and countering Western attempts to introduce mechanisms that restrict gas prices. There is also the possibility of Moscow offering to share a portion of the market, which would be a significant step toward Russia exerting control or influence over the North African fuel market. Previously, this economic opportunity lacked strategic support from Russian political leadership, but now it appears that both countries have reached an agreement on mutual cooperation in this area. Additionally, Moscow has proposed extending cooperation to nuclear energy and agriculture. As economic development progresses, a visa-free regime between the two countries could gradually be adopted, facilitating easier travel and benefiting further trade relations.

However, the exact terms of the agreement in the energy sector between the two parties remain unknown. Algeria’s decision regarding its stance—whether to align with Russia and restrict gas supplies to Europe or to prioritize economic gains by exporting fuel to the continent—will hold immense significance for the North African nation’s future. Based on statements expressing intentions to consolidate and expand cooperation, it is possible to speculate that pressures from Eastern Europe may eventually outweigh the prospects of profitability, resulting in the termination of valuable fuel supplies. It is worth noting that Algeria has strong energy industry ties with Italy. Nonetheless, the current sentiment in Europe is not particularly favourable towards hydrocarbon fuels. With plans to reduce reliance on hydrocarbons over the next 10-15 years, the group of states led by Brussels may opt to avoid the risk and decline a gas import agreement with a nation that supports Europe’s perceived primary adversary. This could ultimately lead to further isolation for Algeria on the international stage.

In addition to trade-related matters, there are visible efforts to foster cooperation on the geopolitical front. Following the collapse of the Soviet empire, Russia lost several allies in North Africa, including Guinea, Libya, and Angola, which had provided strategic positions for Moscow. However, in recent years, Russia has significantly bolstered its influence on the continent and has actively engaged with countries such as Libya, Mali, the Central African Republic, and Burkina Faso. In the case of Algeria, Moscow has faced challenges due to the lack of legitimacy and international isolation of the Algerian regime. However, Algeria, in exchange for long-term economic and military support, has been the only North African country to refrain from voting against Russia at UN meetings regarding Russia’s aggression against Ukraine. This stance has further tarnished the country’s image, as it remains the only North African nation without NATO support. Disapproval of Algeria’s attitude has also been expressed by the United States, with several senators suggesting that Algeria should face sanctions under the CAATSA law. The current Algerian visit to Russia and the intention to deepen relations with Moscow, regardless of Russia’s aggression against Ukraine, have also sparked resentment from Western nations.

On the other hand, the visit of the Algerian delegation to Russia also presents a paradoxical opportunity that could potentially enhance Algeria’s position on the international stage. It has been reported that the Russian President expressed agreement for Algeria to act as a mediator in efforts to resolve the ongoing war in Ukraine. Such a role could contribute to improving Algeria’s international reputation and increase its value in the eyes of Moscow, especially if the mediation efforts yield positive results. In return, Algeria would appreciate heightened Russian support in the dispute over Western Sahara, which remains occupied by Morocco.

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