Relations between Algeria and France have nosedived lately, due to disagreement over autonomy for the Western Sahara, immigration tensions, a series of diplomatic incidents, and Algeria’s historic grievances over the war of independence and French nuclear testing on Algerian territory.
The potential unravelling of relations between France and Algeria will create opportunities for others to connect with Algeria, provided they understand Algiers will be a partner, not a client.
Algeria started to distance itself from France, and French culture, in early 2022 when the Ministry of Culture “announced that it is banning French language in official correspondence, dealings and activities, and circulating the use of Arabic.”
As recent hostilities escalated, in April the Ministry of Higher Education announced it would use the English language as a language of instruction, in lieu of French, at universities effective in September.
Algeria is telling France, “we can still be friends,” and opening up to political and economic collaboration with others.
Algeria is a major producer of hydrocarbons. According to the U.S. International Trade Administration, “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…about two-thirds of the Algerian territory remains underdeveloped or unexplored, with an estimated 100 undeveloped discoveries.”
Algeria's foreign trade is heavily influenced by its hydrocarbon resources, which dominate its exports. In 2023, hydrocarbons accounted for nearly 91% of Algeria's total export volume, according to Lloyds Bank. Key exports include petroleum gas, crude petroleum, refined petroleum, and fertilizer. Algeria's main export destinations are Italy, France, Spain, the United States, and the Netherlands.
Algeria's non-hydrocarbon exports are dominated by four categories: semi-finished products, foodstuffs, electricity, and raw materials. Raw materials include iron and steel; inorganic chemicals; and salt, sulphur, stone, and cement.
On the import side, Algeria primarily brings in wheat, automobiles, concentrated milk, corn, and raw sugar. Its main import partners are China, France, Italy, Turkey, and Brazil.
Algeria has also signed trade agreements, such as the African Continental Free Trade Area (AfCFTA), to boost its trade and diversify its exports to include agriculture and pharmaceuticals. Algeria can maximize its trade in AfcFTA relationships by collaborating with the United Nations Economic Commission for Africa. Algeria is also a member of the Greater Arab Free Trade Area (GAFTA), a free trade area of 14 countries in Africa and the Middle East, so it is already covered by a free trade agreement with several Arab African countries, including Egypt, Tunisia, Libya, Morocco, and Sudan.
Algeria's trade balance has changed from a deficit of 9.4% of GDP in 2020 to a 0.7% surplus in 2021, driven by a 70% increase in hydrocarbon export revenues, according to the World Bank. The overall budget deficit also narrowed, from 12% to 7.2% of GDP, supported by the jump in hydrocarbon revenues. However, Allianz forecasts a return to a deficit is expected by 2025 due to declining non-renewable energy prices.
Algeria exports natural gas to Europe via three pipelines: the Enrico Mattei (Transmed) pipeline to Italy, the Medgaz pipeline to Spain, and the Maghreb-Europe (MEG) pipeline to Spain via Morocco. (The MEG pipeline is now used for the re-export of natural gas from Spain to Morocco, following Algeria’s decision to cease gas shipments to Morocco in November 2021 to pressure Morocco over Western Sahara autonomy.) Italy is the main destination for Algeria's natural gas exports, accounting for almost 67 percent of the total exports, followed by Spain with around 30 percent.
Algeria provides 12% of France’s natural gas imports and will likely continue to abide by the delivery contract despite the recent tensions, as terminating shipments will earn it a reputation as an unreliable supplier.
China has made significant investments in Algeria across various sectors, pledging $36 billion as part of the Belt and Road Initiative (BRI), focusing on manufacturing, technology, transport, agriculture, and renewable energy. Chinese energy giant Sinopec has partnered with Sonatrach, Algeria’s national state-owned oil company, for hydrocarbon exploration and development. China and Algeria have a long-standing relationship, with cooperation agreements covering areas such as aviation, energy, agriculture, and telecommunications.
China recognized the Provisional Government of the Algerian Republic in 1958 and established diplomatic relations within three months of independence in 1962, and China has recognized Algeria’s support for its securing its seat at the United Nations. In 2014, Algeria became the first Arab state to establish a comprehensive strategic partnership with China.
And in February Washington’s bête noire, Chinese telecoms giant Huawei, announced a partnership with Algeria Telecom to build an ultra-high-speed optical network that will support the development of the digital economy that will reduce reliance on hydrocarbon exports.
Moscow recognized the Provisional Government of the Algerian Republic in October 1960, and established diplomatic relations with the provisional government in March 1962 - before the official proclamation of its independence. The U.S. also supported Algerian independence, and President John F. Kennedy hosted Algeria’s first prime minister at the White House during the height of the Cuban missile crisis.
The United States is a significant investor in Algeria, with 29% of total Foreign Direct Investment (FDI) coming from the U.S. as of 2024, primarily in the hydrocarbons sector. The Algerian government has welcomed U.S. companies to invest in various sectors, including agriculture, information and communications technology, mining, renewable energy, and healthcare. The U.S. and Algeria signed a Trade and Investment Framework Agreement (TIFA) to enhance economic cooperation and address challenges in their trade relationship.
As a key natural resource producer Algeria is a natural fit for the BRICS group, but paused membership in 2023 in order to accelerate long-overdue domestic reforms, but in 2024 joined the BRICS New Development Bank.
In terms of the arms trade, the U.S. supplies rival Morocco, and Algeria secures 73% of its weapons from Russia. The U.S. Department of Commerce notes, however, “Algerians look to U.S. suppliers mainly for military communications and electronics, as well as ground vehicles.”
In January 2025, the U.S. and Algeria signed a 10-year ‘first-of-its-kind’ agreement to expand military cooperation that the Pentagon said was “a major shift in Algerian foreign policy,” though that remains to be seen. And it may have been “first-of-its-kind” for the U.S., but it isn’t for Algeria which concluded a similar agreement with China in 2023.
In a recent interview, Algeria’s ambassador to the U.S., Sabri Boukadoum, highlighted American-Algerian trade and noted “Our objective is to consolidate our partnership with the United States, particularly in security and economic domains…” The country is a potential source of metals and industrial minerals, such as iron ore, rare earth elements, and high purity (98% to 99.68%) silica which has applications in electronics, telecommunications, renewable energy, and healthcare
Algeria and Russia have enjoyed longstanding ties based on the 2001 Strategic Partnership Agreement and the 2023 Enhanced Strategic Partnership. Algiers has rebuffed Moscow’s calls for use of a naval base as this would compromise its non-aligned status, though it recently took delivery of the Sukhoi Su-35S fighter as a bridge to the stealthy Su-57.
Defense cooperation with Algeria will be a test for the U.S. which is justly known as being unable to “play well with others,” especially when Russia and China are in the mix. Will Washington use the threat of sanctions on Algerian officials or on Russian and Chinese suppliers to edge them out of Algeria’s economy?
In addition, Washington’s obsession with Iran will be whetted by improving relations between Algiers and Tehran.
In July 2023, Algeria’s foreign minister, Ahmad Attaf, met the late president of Iran, Ebrahim Raisi, in Tehran, and in March 2024, Iran and Algeria inked six cooperation agreements - in oil and gas, science and technology, the knowledge-based economy, tourism, sports, and the media - when President Raisi visited Algiers.
In April 2024, then-Iranian foreign minister, Hossein Amirabdollahian, met with Foreign Minister Attaf, in New York City, in November 2024, an Iranian delegation visited Algiers.
The Jerusalem Post recently claimed “Iran is turning Algeria into an IRGC outpost” and, while Iran and Algeria are increasingly simpatico, Algiers has made non-alignment its brand and won’t want to give France an excuse to rally American and European anti-Iran sanctions in the cause of Paris’s goals.
Algeria fought two wars of independence, the first against France (1954-1962; 1.5 million dead) and the second against Islamist rebels (1991-2002; 150,000 dead), wars that have shaped its defensive posture. Algeria was a founding member of the Non-Aligned Movement, mostly developing countries concerned with decolonization and equitable economic development.
Algeria will welcome win-win collaboration, a place more comfortable for Moscow and Beijing, than Washington whose demands may leave it with 100% of no deal.
James Durso (@james_durso) is a regular commentator on foreign policy and national security matters. Mr. Durso served in the U.S. Navy for 20 years and has worked in Kuwait, Saudi Arabia, and Iraq.
