Tensions Algeria – Spain: what impact on economic exchanges?

For several weeks, relations between Algeria and Spain have been far from what they were before the Spanish government took a position in favor of Morocco regarding the Western Sahara issue. Which, we can say, has negatively marked the relations between Madrid and Algiers, especially on the economic level.

The first repercussion and not the least for the Spanish side, is that of reviewing gas prices upwards on the Algerian side. Indeed the diplomatic conflict resulted in the decision of Algiers to review the selling prices of gas to Spain.

Spain takes a dim view of the new agreement between Italy and Algeria, which aims to increase the level of gas transfer, which would mean “the end” of its project to become an energy hub to serve the ‘Europe.

The price of LNG arriving by tanker is by definition more expensive than gas exported via pipeline such as Medgaz linking Algeria to Spain. Because it should be noted that Spain bought in February 2022, 32% of its American gas needs and 21% from Nigeria.

According to the Spanish media Okdiario, “technical problems would prevent the sending of the quantities of gas agreed by the contract via Medgaz”. This same media cites sources who “would reproach the Algerian side for invoking technical problems for not sending sufficient quantities of gas, when it was agreed to increase the flow of gas, since the closure last October of the GME link passing through Moroccan territory”.

Still according to Okdiario, Spain “received in February 8801 GWh from Algeria and not a single ship of liquefied gas arrived at the regasification plants… The figure is lower than that which arrived in January and represents only 23% of the total, a figure lower than the 45% before the closure of the GME gas pipeline”.

After gas, the agricultural sector affected by the Algerian-Spanish crisis

Agriculture, another sector in Spain which is being hit hard by the positions of the Spanish government, the Algerian market would be closed to Spanish farmers and commercial operators. Other media in this southern European country report that Spanish farmers have had to lower the price of livestock on the domestic market by 20 to 30 euros because of the closure of the Algerian market to their products. It should be noted that Algeria is one of the leading markets for Spanish beef, buying nearly 20,000 tonnes per year.

“A few days after the announcement of Spain’s support for the Moroccan autonomy initiative for the Sahara, Algeria first closed its market to Spanish beef, then gradually to all agricultural and commercial products”, according to Spanish media.

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