Sanctions and Strait of Hormuz: Supply chains at risk
For Algerian businesses, this matters because 80% of Europe-bound gas exports transit through the Strait of Hormuz. Recent disruptions in 2025—when tankers faced delays due to tensions—cost Algerian energy firms $120 million in lost revenue. If the stalemate drags on, shipping costs could rise again, squeezing margins for SMEs reliant on European markets. Entrepreneurs in agro-food exports (Algeria’s second-largest trade sector after hydrocarbons) should monitor port delays in Dubai and Rotterdam, where Iranian-backed blockades have historically caused bottlenecks.
Oil prices and local business costs
Small-scale entrepreneurs—like those in textile manufacturing (a $3 billion industry) or pharmaceuticals—face a double hit. Many source raw materials from Europe or the UAE, where energy-intensive production costs are climbing. Meanwhile, the Algerian dinar’s 3% devaluation in 2026 (partly linked to oil revenue fluctuations) erodes purchasing power. The National Agency for SME Development (ANSED) has yet to announce relief measures, leaving founders to absorb the shock.
Diaspora investments: Where to hedge risks?
Those with ties to Iran’s economy—such as Algerian traders in Tehran’s bazaar (a niche but active community)—now face tighter US sanctions enforcement. The OFAC (Office of Foreign Assets Control) has increased scrutiny on indirect transactions, making cross-border payments riskier. Entrepreneurs should diversify supply chains away from Iranian intermediaries, especially in automotive parts (where Algeria imports $400 million worth annually) and pharmaceutical ingredients.
Sources
middleeastmonitor.com
Anadolu Agency
Key takeaway for entrepreneurs
Algerian SMEs should lock in long-term supply contracts now to avoid oil-linked price hikes, while diaspora investors should prioritize sectors insulated from Strait of Hormuz disruptions—like tech startups or renewable energy. Monitoring ANSED’s next support package (expected by year-end) will be critical for cash flow.
Sources
💡 Starting a business in Algeria? GlobalStart guides you step by step: procedures, real costs, company forms (SARL, EURL, SPA) and CNRC registration.