Iran War Disrupts Gas Markets: Italy and Spain Scramble for Algerian Energy Deals - News and Statistics

Apr 29, 2026

According to an analysis by Maya Ikene of Ghent University, the ongoing Iran war is not only disrupting gas markets but also reshaping energy alliances across Europe. The scramble for Algerian gas by Italy and Spain highlights a difficult reality: the green transition is progressing, but not swiftly enough to avert the next crisis.

Emergency Diplomacy in Algiers

After gas prices surged by over 50% within weeks following the war’s onset in late February 2026, and with storage levels already unusually low for the season, Italian Prime Minister Giorgia Meloni and Spanish Foreign Minister Jose Manuel Albares both traveled to Algiers within 24 hours of each other. Despite their domestic political differences, both nations turned to the same supplier when gas supplies tightened.

Asymmetric Impact of the Shock

The immediate disruption came from Qatari liquefied natural gas (LNG) flows through the Strait of Hormuz, after QatarEnergy declared force majeure on some LNG contracts. Italy bore the brunt of the impact, as Qatari LNG had supplied roughly 10% of its annual gas needs—a significant exposure for a country heavily dependent on gas-fired power. Rising energy costs could push Italian inflation up by nearly a percentage point by the end of 2026. Spain entered the crisis in a relatively stronger position, with more diversified supply and higher reserves.

The structural differences are evident in electricity markets as well. So far in 2026, gas has influenced Spain’s electricity prices during only about 15% of hours; in Italy, that figure is closer to 89%.

Algeria’s Growing Centrality

Algeria already supplies both countries substantially. It delivered around 20 billion cubic metres to Italy in 2024, roughly 30% of Italian consumption, via the Transmed pipeline through Tunisia. For Spain, Algeria is the primary pipeline supplier through the Medgaz direct submarine link to Almeria. Meloni’s visit secured commitments to deepen cooperation between Eni and Sonatrach, including in offshore and shale gas exploration. Albares arrived the next day with a different posture, consolidating a strategic advantage and a diplomatic relationship that had been strained.

The Western Sahara dispute between Spain and Algeria remains unresolved, but energy urgency is reshuffling diplomatic priorities. During Albares’s visit, Algerian President Abdelmadjid Tebboune confirmed he would reactivate the 2002 Treaty of Friendship, which had been suspended.

Infrastructure Limits

The Medgaz pipeline has limited headroom; talks focus on an increase of up to 10%. The old Maghreb-Europe pipeline, which ran through Morocco, has been idle since 2021 after Algeria shut it down following a diplomatic rupture with Rabat, and it is not expected to restart soon. On the Italian side, the Transmed corridor via Tunisia is more stable, and Algeria has signaled willingness to increase volumes, though Sonatrach’s ability to deliver substantially more gas in the near term remains uncertain.

Algeria is also planning larger projects, including the long-discussed Trans-Saharan Gas Pipeline to eventually bring Nigerian gas northward to Europe. Even if revived, this remains a long-term ambition.

A Pattern of Deferred Reckoning

After Russia’s invasion of Ukraine in 2022, Europe scrambled to reduce dependence on Russian gas, pivoting toward US LNG, Norwegian pipeline flows, and North African suppliers including Algeria. Now, with Qatari LNG disrupted, the same logic is pushing harder into the same Algerian corridors. The geography shifts, but the underlying dependency does not.

Spain’s faster renewable deployment and more diversified electricity mix have strengthened its resilience to the current shock. Italy’s acute vulnerability reflects the cost of moving more slowly down the same path. The diplomatic choreography around Algiers was necessary, and Algeria is a serious partner with real infrastructure. But Europe has absorbed multiple energy shocks in four years, each time finding a new supplier and deepening bilateral ties while deferring a structural reckoning.

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