Russia launched its military intervention in Ukraine on February 24. The crisis placed Algeria in an embarrassing position between Russia, after it launched a military attack against Ukraine, and Western countries which reject Russia’s intervention while backing Ukraine.
Cooperation Relations with Russia
Algeria maintains strong ties with both Russia and European countries. But its relations with Russia are closer.
1. Algerian-Russian strategic partnership:
Moscow recognizes the importance of Algeria's political weight in the Maghreb region and North Africa. In recent years, Moscow promoted its political and economic relations with Algeria creating common interests for both countries.
Additionally, Russia is a major exporter of arms to Algeria. In 2006, Algeria became the largest importer of Russian arms when it signed a deal worth $7.5 billion.
Since 2019, Algeria alone purchased 200 transport helicopters, fighters and combat vehicles from Russia. It also ordered various Russian-made air defense systems and missiles, as well as more than 500 tanks. Russian-made arms are estimated to account for about 69 percent of Algeria’s arsenal.
2. Joint Russian-Algerian investments:
Algeria reinforced its natural gas exports through cooperation with Russia. Algerian state-energy company Sonatrach signed a deal for developing the al-Assel field in the Algerian desert. The joint venture is expected to start production in 2025. Sonatrach has a 51% stake in El Assel, while Gazprom EP International has the remaining 49%. Algeria is unlikely to give up its relations with Russia to plug Europe’s gas supply gap away from Russia’s influence.
3. Algeria’s economic relations with Russia:
Algeria has strong economic and trade relations with Europe that are driven by strategic partnership agreements. Sonatrach is the second largest exporter of natural gas to Italy after Russia. Moreover, Algerian gas exports to the European country went up 9.2 percent in 2020
In 2021, Algeria increased its share of Italy’s gas market 9.2 percent compared with the previous year.
Although Algeria is the fourth-largest producer of gas in the world, accounting for 3.37 percent of global production, Russia’s share of the market is more than 16 percent. That is why the Europeans are well aware that no country can replace Russian gas supplies, if disrupted for any reason. Additionally, in both Algeria and Qatar, whose output now is at its maximum capacity, there is no gas surplus that can be instantly pumped in case of supply disruption.
Aligning with Russia
Algeria tried to take a cautious position on the crisis over Ukraine. But while it did not declare support to Moscow, Algeria is in fact pursuing a policy practically supporting Russia. This can be explained as follows:
1. Maintaining relations with Russia:
Algeria did not take an official political position on the Russian-European conflict, refraining from declaring support to, or condemning Russia’s military intervention in Ukraine. All statements issued by the Algerian foreign ministry were focussed on the conditions of the Algerians in Ukraine and ways of helping them to stay safe amid the military turmoil or return home.
On the other side, Algeria, and 34 other countries, abstained from voting on a Security Council resolution proposed by the US and European allies on March 2nd condemning Russia’s military invasion of Ukraine. This position reflects Algeria’s willingness to maintain strong diplomatic and military ties with Russia.
2. Denying readiness to replace Russian Gas supplies:
Algeria has denied that it is ready to increase gas exports to Russia if Russia halted its supplies. After French newspaper Liberte published an interview with the CEO of Sonatrach claiming that Algeria was ready to boost gas supplies to Europe, Sonatrach was quick to deny the claim and accused the newspaper of manipulation and distortion of fact and even filed a case against the publication.
Moreover, Algerian officials explained that while Algeria’s total gas exports to Russia are about 42 billion cubic meters, one Russian pipeline can carry the same amount of gas to Europe, which means that Algeria is not able to plug a gap in gas exports to Europe.
The statements carried by the French newspaper were meant to calm the public in Europe, especially after gas prices hit record highs pushing inflation in the Eurozone to as high as 5.8 percent in February, up from 5.1 percent in the previous month.
3. Rejecting Ukraine’s plan to recruit mercenaries:
Algeria strongly protested an announcement published by the Ukrainian Embassy in Algeria expressing its desire to recruit “foreign nationals to joint resistance against the Russian occupation and defend global security. “
The Algerian foreign ministry demanded the embassy delete the announcement published on its account on Facebook on March 5, 2022. The move is understandable, not only because Algeria and Russia maintain close ties, but also because the call for foreign fighters is in violation of international law and can attract Algerian nationals who can gain military experience and then go out of control of the Algerian state. Such a development would pose threats to the security of any state.
Implications for the Algerian Economy
The Russian-Ukrainian conflict has several implications for Algeria that can be outlined as follows:
1. Boosting economic gains:
Algeria benefited from the conflict between Russia and Ukraine that sent oil and gas prices to record highs. Algeria generated more income much needed for its economy struggling with issues recently exacerbated because of the Covid-19 pandemic.
Because Algeria relies on its energy exports as a major source of national income, oil prices going up to as high as US$130 a barrel because of the crisis over Ukraine will secure additional revenue for Algeria to meet its demand for more wheat imports from Russia, which stood at 363.5 tons in January, following an agreement signed between the two countries.
Algeria also announced plans to diversify its wheat imports. Additional revenue from increased gas exports to Europe will enable Algeria to avoid the implications of the crisis for its food security.
2. Difficulties in importing wheat from Russia:
Algeria is facing challenges to wheat imports from Russia. Algerian transactions for buying Russian wheat are conducted through a global financial messaging system known as SWIFT. But after European states imposed sanctions against Russia over its invasion of Ukraine, Algeria had to look for other international partnerships with countries such as Argentina, Mexico and Canada. But because Russia and Ukraine account for more than a quarter of the world's wheat exports, disruption of wheat exports from the two countries can cause significant wheat price hikes, especially if the war drags on for months.
3. Rapprochement between Algeria and Italy:
Italy seeks to maintain strong relations with Algeria at this time, especially regarding gas imports from the North African country. Italy imports about 40 percent of its gas from Algeria, and 30 percent from Russia.
As Italy backs Ukraine and international sanctions against Russia, Rome fears that Moscow would retaliate by imposing sanctions against Italy and reduce its gas supplies to the European country. That is why Italy is trying to minimize the implications of such a scenario by relying on secure gas supplies from Algeria, which, nonetheless, cannot replace Russian gas supplies.
To conclude, Algeria’s position on the crisis over Ukraine is more like neutrality, but in reality, it is supportive of Russia. This was evidenced by Algeria’s abstinence from voting on the Security Council’s resolution on the Russian invasion of Ukraine, as well as its rejection of Ukraine's attempts to recruit mercenary fighters. While Algeria is making gains from higher energy prices, it will face the challenge of higher prices of food, and wheat in particular.
