Energy Premium Extends Lifeline: Algeria Eases Budget Pressure Amid Middle East Conflict

Golden Ten Data reported on March 13 that Algerian authorities found a lifeline after the Russia-Ukraine conflict triggered a surge in energy prices. Now, people are hoping that oil price increases driven by the Iran war will once again provide support. This North African country, with a population of 47 million, has long relied on its oil and gas reserves—among the largest in Africa—to pay for various subsidies. Since the oil price crash in 2014 dealt a heavy blow, the country has found it increasingly difficult to fill its budget deficit. On March 9, oil prices broke through $100 per barrel. Although prices have fluctuated frequently since then, they have risen by more than 50% due to market concerns that the conflict will hinder Middle East supply. Independent economic and financial analyst Mahfoud Kaoubi stated that the price increase can only be a good thing for the authorities. If oil prices further soar to the $120-$125 range, this OPEC member will be able to achieve budget balance. Currently, Algeria’s daily output is about 977,000 barrels.