Spain Secures Deal With Algeria to Boost Gas Imports as Energy Crisis Deepens

Spain Flies to Algiers as Energy Crisis Bites

Spanish Foreign Minister José Manuel Albares travelled to Algiers on Thursday and announced that Spain and Algeria have reached an agreement to significantly increase natural gas imports — a deal brokered directly with Algerian President Abdelmadjid Tebboune as the energy fallout from the Iran war continues to intensify.

"We have decided to deepen our gas and energy relationship and take it even further by increasing supply volumes," Albares said following the meeting.

The increase amounts to up to 12.5% more pipeline gas — approximately one billion cubic metres (bcm) per year of additional supply flowing through the Medgaz pipeline, the direct undersea connection running from Algeria to the Spanish coast. Medgaz currently has a capacity of around 10.5 bcm per year, following an expansion in 2021, and has been running near full capacity in recent months.

Why Algeria — and Why Now

Algeria was already Spain's largest single gas supplier, providing 42.5% of total Spanish gas imports in 2025. The relationship has grown steadily more important since the closure of the Maghreb-Europe pipeline through Morocco — a casualty of Algeria-Morocco tensions — which left Medgaz as the sole direct pipeline link between the two countries.

The timing of the deal is no coincidence. Since the outbreak of war involving the US and Israel against Iran on 28 February 2026, European energy markets have been in turmoil:

• Oil prices surged to nearly $120 per barrel before settling above $100 — roughly 40–50% above pre-war levels
• European natural gas prices have risen more than 60% since the conflict began, with one week seeing a 67% spike followed by a further 30% single-day jump
• Petrol prices at Spanish forecourts have risen by approximately 34%
• Traffic through the Strait of Hormuz — through which around 20% of global oil supply passes — has been near-halted, with Iran controlling access

The International Energy Agency chief described the situation as the "greatest global energy security challenge in history." The IEA coordinated a release of 400 million barrels from strategic reserves, including 172 million from the US, but price relief has been limited.

Spain had made its approach to Algeria several weeks before Thursday's announcement, as soon as the conflict began driving prices up. The Algiers visit formalised what had been in negotiation since early March.

Sanchez's Anti-War Stance Pays Off — Twice

The Algeria deal did not arrive in isolation. On the same day, Spain was also benefiting from a separate energy windfall directly linked to Prime Minister Pedro Sanchez's refusal to align Spain with the US-led military action.

Iran's Embassy in Spain formally confirmed this week that Tehran classes Spain as "not hostile" and will allow Spanish commercial vessels free and unrestricted passage through the Strait of Hormuz — the only European nation to receive such treatment. The Iranian Embassy posted on X that Spain is "committed to international law" and that Tehran is "receptive to any request coming from Madrid."

Spain's position has been consistent throughout: Sanchez has repeatedly called the war "illegal", refused to allow US forces to use Spanish military bases at Rota and Morón, and told the Spanish Congress this week that the conflict is "an absolute disaster" — worse in its potential consequences than the 2003 Iraq war. That stance has generated considerable friction with Washington — President Trump called Spain "terrible" and threatened trade action — but has produced concrete benefits on the energy front.

Spain Is Not Alone — Italy Also Racing for Algerian Gas

Spain is not the only southern European country scrambling to lock in additional Algerian supply. Italian Prime Minister Giorgia Meloni also visited Algiers in the same week seeking increased gas exports, as Bloomberg reported Italy joining what has become a broader European race to secure North African gas while Middle Eastern supply routes remain disrupted.

The competition underlines Algeria's dramatically increased strategic leverage over southern Europe. Sonatrach, Algeria's state energy company, holds a 51% stake in the Medgaz pipeline, with Spain's Naturgy as a minority partner. Sonatrach also holds approximately a 4% stake in Naturgy itself — a relationship that has given the two countries deep commercial ties alongside the diplomatic ones.

Spain's €5 Billion Economic Shield

The gas deal comes alongside the Spanish government's €5 billion emergency package approved last week, designed to protect households and businesses from the energy price shock. Measures include fuel tax cuts and broader cost-of-living support. Sanchez has framed the package in direct terms: "Every bomb that falls in the Middle East ends up hitting the wallets of our families."

The combination of the Algeria gas deal, free Hormuz passage for Spanish shipping, and the domestic economic package reflects a coherent — if high-risk — strategy from Madrid: maintain a principled anti-war stance, leverage the diplomatic goodwill it generates, and cushion Spanish households from the worst of the energy fallout in the meantime.

This article is based on reporting from Bloomberg, The Olive Press, Asharq Al-Awsat, and Euronews, published March 26, 2026. This article is for informational purposes only.