African energy projects have limited opportunities to capitalise on Middle East crisis

The crisis in the Middle East – still unresolved and even re-escalating as of late July – has intensified the focus on energy security and the need to diversify sources of supply, especially among those countries that are net importers of oil and gas.

As part of this, interest has risen in oil and gas resources that represent alternatives to supplies disrupted in the Strait of Hormuz, including those in Africa.

This is not surprising, given Africa’s abundance of oil and gas resources across multiple countries, its history of energy development and its relative proximity to buyers in Europe.

However, there are considerable obstacles for developers of new projects across Africa, including bureaucracy and political risk. As a result, while it is possible that the recent volatility in the Middle East could spur new development in various African countries, any progress is likely to be incremental and major changes to the current pace of development are not expected.

Advantaged projects

Some upstream projects are at more of an advantage than others as oil and gas importers seek to diversify their sources of supply.

“The situation in the Middle East has reinforced the importance of supply diversification for oil and gas importers,” a Fitch Ratings director, Jakub Zasada, told Gas Outlook. “In Africa, this is most relevant for LNG and gas export projects that are already relatively advanced, as buyers and investors tend to favour developments with clearer execution pathways and shorter time to first production.”

According to Zasada, projects in countries including Mozambique, Senegal/Mauritania and Nigeria could benefit from stronger commercial interest. However, he cautioned that the extent to which this translates into final investment decisions (FIDs) would still depend on project-specific economics, security conditions, infrastructure availability and regulatory stability.

And indeed, in many cases, this is where additional hurdles could crop up.

“Africa has always held huge promise and it’s an established oil and gas producer – a very large one – but those political risks are not going anywhere,” Rapidan Energy’s director of global gas and LNG, Alex Munton, told Gas Outlook.

In particular, Munton pointed to Nigeria and Libya as examples of countries whose considerable oil and gas resources are now attracting additional interest, but where political risk is also a significant deterrent.

The main African gas supplier to Europe is Algeria, and Munton said its supply had become “an essential part of the European gas mix” amid the geopolitical crises of recent years.

However, while Algeria is a stable supplier, Munton does not view it as a growth region. This can be attributed in part to the country’s complex bureaucracy. Munton said that the big opportunity in Algeria was unconventional tight gas but added that the level of state participation that the Algerian government wanted represented a deterrent. This is because international oil companies (IOCs) would not have free rein to pursue the kind of efficiency gains needed to drive an economically viable unconventional industry like they are able to do elsewhere, such as in the US.

Renewed interest in African energy projects is not limited to the upstream. Indeed, the proposed Trans-Saharan Gas Pipeline (TSGP) and the Nigeria-Morocco Atlantic Gas Pipeline are back in the spotlight and have both seen some recent progress.

Most recently, West African leaders formally endorsed the Nigeria-Morocco Atlantic Gas Pipeline in late July. However, there is significant scepticism over the prospect of either pipeline ultimately being built, given the high costs, major political risks and significant amounts of international collaboration involved.

“These things just carry too much political risk,” Munton said, describing such pipeline proposals as “a bit of a non-starter”.

On the LNG side, meanwhile, there are also export projects that are already operational, as well as more capacity under construction. However, Munton noted that while floating LNG (FLNG) can be deployed offshore in countries such as Mozambique, it cannot be built out at scale. Meanwhile, onshore construction in Mozambique remains stalled owing to conflict risk.

There are “massive offshore resources” in Mozambican waters, Munton said, “but to do it at scale it needs to be onshore, and that’s where there are still struggles”.

Attracting investment

There are certain steps African countries can take in order to boost their appeal to international oil and gas investors.

“There is already significant investment ongoing in oil and gas projects in Africa, however further strengthening of the operating environments of the various resource-rich countries in the continent could result in more capital being invested in projects on the continent, and/or investments being accelerated,” said Zasada.

“This could include improvements to the stability, efficiency, and transparency of the regulatory frameworks governing investments into the oil and gas sector, as well as more competitive fiscal regimes, which govern how the cash flows from oil and gas projects are allocated between producers and the respective state.”

Munton also believes that an improved investment environment – including regulatory and fiscal frameworks – could make a difference to international investors.

“The IOCs are very deeply involved in African oil and gas, but over many years, there’s been a drift away, with them divesting assets in many of these markets,” Munton said. He pointed to Nigeria and Algeria as examples of this. Overall, Munton expects oil and gas growth in Africa to be incremental and sees no “needle-moving opportunities” out there, on the same level that the crises of recent years have moved the needle for US LNG.

Zasada had a similar conclusion.

“The Middle East situation may improve the strategic case for African oil and gas development, but it is unlikely on its own to overcome longstanding above-ground and financing challenges that continue to constrain project execution across the continent,” Zasada said.

It is worth noting, too, that the Middle East crisis has reinvigorated the debate about reducing dependence on fossil fuels altogether over the longer term. Indeed, even as interest in developing African oil and gas projects for export has increased, the continent’s imports of solar panels were also reported to have surged in early 2026 as the conflict in Iran was playing out.

The long-term impact of the Middle East crisis remains to be seen, but certain countries that are currently major oil and gas importers are also pursuing a shift to more renewable energy over the coming years and decades. There is currently considerable confidence in future oil and gas demand, but the longer the crisis continues, the more uncertain this could become.