Introduction

The crisis triggered by the closure of the Strait of Hormuz to much commercial shipping serves as an entry point through which to examine the hurdles of planning a green transition from the global periphery. The cumulative effect of obstructive actions by both Iran and the United States in and around the strait includes a powerful impact on the Maghreb’s two largest economies. Morocco, whose phosphate fertilizer production depends on sulfur and ammonia imports from the Gulf, faced supply disruption at a time that its green industrial strategy—intended to replace that dependency—remains unrealized. Algeria stands to benefit from increased hydrocarbon revenues as a result of newly ascendant oil prices, but for this very reason faces renewed pressure to postpone a transition to green energy whose timeline was already contested.

The travails of the Maghreb’s two economic heavyweights encapsulate the tension between the energy sovereignty sought by developing states and the kind of global upheaval that militates against its attainment. Indeed, the Hormuz crisis highlights the fact that a geopolitical disruption in the Gulf or the Middle East—even more so than, for example, the war in Ukraine—will not necessarily remain confined to its region of origin. This reality is affecting how Algeria and Morocco navigate their transition to green energy. It is also further straining the already delicate balance between domestic stability and external considerations in both countries.

The Renewable Energy Drive: Push and Pull Dynamics

The green transition entered global policy as a promise of transformation. Since the Paris Agreement of 2015, which established a global framework to reduce greenhouse gas emissions through climate action plans, the decarbonization drive has been organized around reaching a set of milestones ranging from reducing greenhouse gas emissions to attaining renewable-energy targets. The first Global Stocktake, an evaluation mechanism agreed to by the countries participating in the 2023 United Nations Climate Change Conference (COP28) in Dubai, reinforced this trend by assessing states’ progress and calling on several of them to strengthen their climate plans. COP28 also marked the first formal United Nations climate agreement explicitly calling for a transition away from fossil fuels in energy systems. Yet while the pressure to decarbonize has only intensified since, the world in which this transition is supposed to unfold looks increasingly unlike the orderly policy sequence imagined in the Paris Agreement.   

The most recent manifestation of this disjuncture took shape in the Gulf. The U.S.-Israeli strikes on Iran in February 2026 set off a war that caused widespread human casualties, disrupted the region’s geopolitics, and resulted in extensive damage to infrastructure and supply chains. In response to the attack, Iran closed the Strait of Hormuz to most shipping. The United States’ subsequent blockade of Iranian ports compounded the disruption. The crisis quickly assumed global dimensions.

The passage of ships through the Strait of Hormuz had fallen by over 95 percent since March, curtailing both energy and fertilizer flows. Consequently, energy prices surged, with Brent Crude having risen more than 50 percent, against an estimated daily production shortfall of 14.5 million barrels. Concurrently, the cost of fertilizers, ingredients for which are widely sourced from the Gulf, also rose sharply. The World Bank projects urea prices to rise by nearly 60 percent in 2026. The Food and Agriculture Organization has warned that fertilizer prices could average 15–20 percent higher in the first half of the year, which would most likely result in reduced yields for fertilizer-intensive crops such as wheat, rice, and maize. Because major food producers, such as India and Brazil, depend on imported fertilizers, higher costs can shape what and how much farmers plant, ultimately affecting yields and food security.

For the Maghreb’s two largest economies, the crisis renders long-existing tensions ever more acute—between domestic and international resource dependencies on the one hand, and green energy transitions on the other. Within this picture, Morocco and Algeria are tending in different directions. As an importer of ammonia, sulfur, and energy, Rabat is attempting to absorb the shock created by shortages and devise methods to compensate for it. Meanwhile, Algiers is repositioning itself as one of Europe’s main emergency oil and gas suppliers.

The View from Rabat

For Morocco, the Hormuz crisis is a double-edged sword. On the one hand, more difficult access to Gulf sulfur and ammonia threatens to squeeze phosphate production. On the other hand, the crisis has handed Rabat an opening, enabling it to look beyond Gulf producers, with the kingdom’s seaports having likewise reportedly drawn renewed interest as potential transit nodes for ships previously routed through the Gulf. The crisis therefore highlights the ambivalent situation in which the kingdom finds itself. While its phosphate industry still depends on Gulf-sourced compounds, it is also better positioned than other producers to keep its exports going through Atlantic routes. Additionally, Morocco now has added impetus to make good on its green transition plans—though they carry their own risks, particularly if pushed forward hastily.         

The impact of the Hormuz crisis on Morocco, which holds roughly 70 percent of the world’s known phosphate reserves and is one of its largest exporters, was almost immediate. Turning phosphate rock into finished fertilizer requires sulfur—a feedstock the kingdom procures almost entirely from Gulf countries. The latter account for roughly 44 percent of globally traded sulfur, most of it generated as a byproduct of oil and gas refining. The OCP Group, Morocco’s majority state-owned phosphates and chemicals company, imports approximately 3.7 million tons of sulfur annually, the bulk of which is locally turned into the acid that converts phosphate rock into diammonium phosphate (DAP) and monoammonium phosphate (MAP), both used for fertilizer production. The COVID-19 pandemic in 2020 had already posed challenges to this arrangement, with the cost of producing ammonia rising to $1,000 per ton against a pre-pandemic baseline of $110.

Equally important to the discussion is Rabat’s broader energy dependence. Morocco relies on imports for close to 90 percent of its energy needs. Although the price of oil had returned to pre-war levels by the time of this writing—following a ceasefire agreement between the United States and Iran—it may yet rise. For one thing, the fragile ceasefire has already faltered more than once. And, for another, shipping remains affected by insurance costs and continued uncertainty over transit through Hormuz. The combination of higher oil prices and constrained sulfur procurement squeezed consumer purchasing power at a time not long after Moroccan households had absorbed a rise in diesel and gasoline prices to around $1.60 per liter in April 2026. Companies working in construction and real estate were among the most affected; similar pressures were felt across the manufacturing of petroleum-derived products such as plastics. In response to the emergency, the government reactivated financial support for the transport industry starting from March 2026.

Morocco’s exposure to the crisis extends beyond physical supply chains into the regulatory environment in which its green industrial strategy is taking shape. As the closure of Hormuz tightened fertilizer markets, the European Union debated whether to suspend the Carbon Border Adjustment Mechanism (CBAM) for fertilizers, which came into effect on January 1, 2026. The carbon levy was introduced by the bloc partly to reward cleaner producers—such as an OCP that is oriented toward green-ammonia. France and Italy had been pressing for an exemption before the war, citing pressures on European farmers. By March 30, 2026, other member states, such as Croatia and Ireland, had joined the call, warning against threats to the competitiveness of local farmers. The European Commission proposed an “emergency brake” allowing temporary suspension of the CBAM in cases of “severe damage to the Union’s internal market,” and announced parallel temporary tariff reductions on selected fertilizer products. While not directly impacting Morocco now, the temporary suspension shows that even the rules designed to reward green producers can be altered under political pressure, adding a layer of uncertainty to any projected payoff. Meanwhile, the OCP is looking beyond Europe—reportedly selling 90,000 tons of phosphate fertilizer to Latin American markets in March, and holding negotiations with Indian companies for additional deals.

For Morocco, the current crisis recalls what occurred following Russia’s invasion of Ukraine in 2022, when global ammonia and fertilizer markets were disrupted—except for the fact that, in contrast to the Russia-Ukraine war, the Hormuz closure represents a physical chokepoint that makes alternative sourcing more difficult. Significantly, because the 2022 shock exposed the OCP’s dependence on imported ammonia (with the company reportedly having spent $2 billion on its purchase that year), Rabat announced a green ammonia strategy aimed at producing the compound from locally produced and renewable hydrogen. The plan included a $7 billion green ammonia complex near Tarfaya. However, the latter is not yet operational. Also, green ammonia production may still not entirely offset dependency on the second important compound, sulfur. With Gulf supply curtailed, the OCP has had to diversify sulfur supply routes, notably through Kazakhstan and the Black Sea, while shifting production toward triple superphosphate fertilizers, a variant that requires significantly less sulfur than DAP and MAP, which previously served as the go-to options.

The View from Algiers

Algeria presents a different set of constraints. Whereas Morocco is rendered vulnerable by its reliance on imported energy and fertilizer inputs, Algeria’s international standing is enhanced due to its hydrocarbon wealth. Observers have noted that this could be an opportune moment for Algiers to cash in on much of the world’s reorienting itself toward oil and gas providers outside the Gulf. However, infrastructural constraints as well as output quotas set by the Organization of the Petroleum Exporting Countries (OPEC), of which Algeria is a member, limit its ability to ramp up production. Moreover, the country is having to contend with ever-increasing domestic gas consumption, something to which the government must give priority even in the face of other states’ soaring needs.  

Between 2020 and 2024, the oil and gas sector accounted for roughly 82 percent of Algeria’s exports and 45 percent of budget revenues. Algeria is the European Union’s third largest gas supplier, and, after Norway, its second-largest pipeline gas supplier. In 2022, when Russia’s invasion of Ukraine severed Europe from its main gas source, several European states began to look to Algiers for relief. In April of that year, Italy reached an agreement with Algeria to increase its gas imports by around 40 percent, with Sonatrach, Algeria’s state-owned oil and gas company, raising its flows through the TransMed pipeline by up to 9 billion cubic meters of additional gas annually. And in July 2022, Sonatrach signed a three-year contract with French company Engie to supply gas—at a new, higher price—amid disruptions to international markets. This enabled Algiers to gain both revenue and geopolitical leverage. In 2025, the gas exports of Sonatrach reached approximately 49 billion cubic meters, of which 14 billion cubic meters were shipped as liquified natural gas (LNG).

This year, the Strait of Hormuz’s closure and Iranian strikes on Qatar’s Ras Laffan LNG facilities—which prompted state-owned Qatar Energy to declare force majeure on shipments to European countries on March 4, 2026—again brought European leaders to Algiers. Italian Prime Minister Giorgia Meloni traveled to the capital, followed by Spanish Foreign Minister José Manuel Albares. This is significant because Italy and Spain, both of which currently source close to 30 percent of their gas imports from Algeria, are seeking to expand purchases. Rome has deepened cooperation between Eni, an Italian multienergy company in which the state is the largest shareholder, and Sonatrach, with recent discussions focused on offshore exploration and unconventional hydrocarbons. Algerian gas also accounted for more than 29 percent of Spain’s total gas imports in the first two months of 2026, arriving mainly through the Medgaz pipeline, in which Naturgy, a Spanish multinational gas and electricity company, is a minority partner.

Algiers has reaped the benefits. The Sahara Blend—Algeria’s benchmark crude, prized by European refiners for its low sulfur content—was trading below $70 a barrel in January 2026 but topped $100 in March, its highest level since the 2022 shock. In early May 2026, even amid a fragile ceasefire, prices continued to oscillate between roughly $95 and $110. By mid-June, the price of oil had fallen below $80 a barrel on expectations—correct, as it turned out—that the U.S.-Iran memorandum of understanding would lead to the reopening of the strait. Still, it remained above the previous year’s average, with a reversion to prewar levels expected to take time. All indications are that external demand, driven by conflict, has returned hydrocarbons to the center of Euro-Mediterranean relations. The same phenomenon has ensured that hydrocarbons remain at the heart of Algeria’s economic and political life.

However, subject as it is to OPEC quotas, Algeria has limited room to expand oil output. In April 2026, it announced only a marginal increase of 6,000 barrels per day, for a total of 977,000 barrels. Substantial new export volumes, whether by pipeline or LNG, would require new upstream investment and infrastructure. Moreover, though the TransMed pipeline has a nominal capacity of around 33.5 billion cubic meters, flows in 2024 were only around 21 billion cubic meters, suggesting that the main constraint is not pipeline space alone but the ability to produce and export additional gas. The Hassi R’mel field, which accounts for close to half of national gas output, has been in long-term decline, requiring repeated boosting measures: first in 2017 with a $2 billion project intended to keep production stable; and then, in 2024, an additional $2.3 billion to upgrade facilities. Domestic gas demand, meanwhile, is rising at 4–5 percent a year, owing to population growth and rising electricity consumption.

No Easy Solutions

The Hormuz crisis shows that the Maghreb’s transition to green energy is taking place amid constraints that impact the region’s two politico-economic heavyweights differently and has prompted dissimilar responses. Morocco remains heavily dependent on imported energy, Gulf-linked sulfur and ammonia, and a shifting European regulatory landscape that may or may not reward the lower-carbon products the CBAM is designed to encourage. By contrast, Algeria sees an opportunity to supply those European countries with what they need.  

So far, Morocco’s response has been twofold. It is diversifying the sourcing of compounds—including sulfur—while turning to renewable energy to reduce longer-term dependence on imported ammonia. The decisive turn toward renewable energy is theoretically prudent but requires green-heavy output to prove viable in the long run. As for Algeria, its move to step in and supply European countries with hydrocarbons helps to relieve economic pressures on the country in the short-term. In the longer term, however, this approach entrenches the rentier model already in place in Algeria, and weakens whatever incentive exists to diversify. As such, even if the Strait of Hormuz reopens on a durable basis and prices return to normal, Algeria would be left with the same challenges that preceded the crisis: persistent dependence on oil and gas, limited fiscal margins, and an unfinished diversification agenda.

In both cases, it is clear that a crisis that erupts elsewhere can reconfigure the two countries’ standing in the global hierarchy. Both Morocco and Algeria have committed to long-term climate action plans, drafted national energy strategies, and articulated their visions of energy sovereignty. Yet also in both cases, the state response to crises is shaped by emergency, whether in terms of reactivation of subsidies, pivoting to alternative buyers, or ramping up production of fossil fuels. Much-heralded green energy strategies are hastily modified or even summarily suspended by the very governments that formulated them.

Together these dynamics complicate the story of energy transition as a linear planned sequence. In policy frameworks, decarbonization is still described as a sequence of events and a series of measurable steps: targets, infrastructural capacity, financing deals, friend-shoring and near-shoring, certifications, and market access. But the seemingly technocratic and linear unfolding no longer holds when crises accumulate. The conditions that produce crises such as the one in the Strait of Hormuz are not accidental, nor are they inevitable. They are the product of political choices by powerful state actors that trap the entire Middle East and North Africa in “forever wars,” with repercussions far beyond.

The strait crisis, and its ramifications, both short- and long-term, demonstrate that disruption is no longer external to green transition plans even in the far-flung countries of the Maghreb. The ramifications in question condition what kind of future remains possible. Algiers may see an opportunity in serving as an emergency global supplier of fossil fuels even if this ultimately does not serve its planned transition. Meanwhile, whereas the Russia-Ukraine war may have reinforced the desirability of green adaptation from Rabat’s perspective, the current crisis is a much more difficult test for Morocco. Hormuz may challenge the viability of its green energy transition. At the very least, a reality characterized by global crises of similar magnitude will alter the imagined nature and format of such a transition.

Conclusion

The question facing Morocco and Algeria is no longer whether to reorient themselves toward green energy. Both have moved in that direction—though Morocco has done so more decisively than Algeria. The question is how and when to act. For Morocco, the current shock shows that its bet on green ammonia for domestic production is justified, for now. The feasibility of this planned pivot will remain dependent on whether renewable production is boosted and subsequently maintained at the requisite high level; if so, this could position the kingdom as a leading supplier of phosphate-derived fertilizers. For Algeria, the choice is starker. Its abundance of oil and natural gas provides immediate fiscal relief as well as enhanced diplomatic leverage—but deepens the country’s dependence on resources that are finite, and whose revenue-generating ability will recede once the current crisis is resolved. Alternatively, Algeria could attempt to keep pace with the timetable for its green transition, but in the process forgo the momentary financial windfall on offer as a result of the increased worldwide need for oil and gas from countries whose output is largely unaffected by the crisis.