Concerns are growing within economic and energy circles about the potential repercussions of the rapidly unfolding events in Venezuela following the US intervention and the arrest of President Nicolás Maduro, particularly regarding the balance of the global energy market and its direct impact on countries heavily reliant on hydrocarbon exports, most notably Algeria.
According to various economic analyses, the danger of this geopolitical shift lies in the possibility of redrawing the map of global oil production, especially if Venezuelan oil makes a strong return to international markets under direct US supervision. This scenario could create a supply glut and put downward pressure on prices in the medium term, at a time when several rentier economies are already suffering from structural fragility.
The Algerian newspaper TSA Algérie highlighted these concerns clearly, considering the events in Venezuela a “geopolitical earthquake.” However, its immediate impact on the markets was not a rise in prices, but rather the opposite. Brent crude oil fell to nearly $60 per barrel in Asian trading, a highly sensitive level for economies like Algeria’s.
In this context, the newspaper quoted Ibrahim Kandouzi, an economics professor at the University of Tizi Ouzou, who believes that this “new geopolitical reality” could change the rules of the game for major players in the energy market, including Algeria, whose budget is almost entirely dependent on oil and gas revenues.
Kandouzi explained that Venezuelan production, currently no more than 900,000 barrels per day due to years of underinvestment and sanctions, could see a rapid recovery if major American oil companies intervene to rehabilitate the fields and infrastructure. This would increase the likelihood of the global market entering a period of overproduction within the next few years.
This scenario is particularly worrying for Algeria, as any sustained drop in oil prices below $60 per barrel would limit the country's ability to cover its public expenditures, widen the budget deficit, and negatively impact the trade balance, given its heavy reliance on imports. This could further strain foreign exchange reserves and threaten the stability of the national currency.
These risks are not limited to the financial sphere; they extend to Algeria's position within OPEC. Analysts warn that any potential energy rapprochement between the United States and Venezuela could weaken the organization's ability to regulate the market and control production levels, reducing its negotiating leverage with major powers.
If the oversupply scenario materializes, OPEC+ may find itself once again forced to reduce production quotas, which would place Algeria in what energy experts call a "double penalty": reduced export volumes on the one hand, and decreased revenues due to lower prices on the other.
Ibrahim Kandouzi believes this situation exacerbates the fragility of the Algerian economy, which he describes as “structurally highly vulnerable” to fluctuations in oil prices, especially given internal indicators reflecting escalating social tensions and sectoral protests linked to rising living costs and fuel prices.
Conversely, the Algerian newspaper report indicates that Algeria maintains strong relationships with major American oil companies such as ExxonMobil, Chevron, and ConocoPhillips, which may provide it with limited room for maneuver should the global energy landscape be reshaped according to new equations.
However, forecasts from international financial institutions, such as Goldman Sachs, predicting that oil prices will remain below $60 per barrel until 2026, present Algeria with complex scenarios. These scenarios necessitate a reassessment of its economic and energy options and an acceleration of economic diversification to avert potentially serious repercussions for its future oil revenues and financial stability.
