Most of the resources, pre-1960, are on the coast.
However, if French demography was more dynamic then I could see more colonists in the cities.
Not really, considering that the Atlas Mountains have throughout history maintained a very resilient and resistant population that maintained a solid identity throughout the rule of Carthage, Rome, the Arabs, and French. There's also plenty of stuff worth grabbing in both the Atlas and the deep Sahara desert. Though France could always assign the bulk of Algerian territory in the south to the sub-Saharan African colonies.
Let's say they go the other way though- imperialistically minded and without concerns for "human rights" PR, Germany and/or Italy decide that they'd prefer to keep the full sum of oil revenue for themselves. The states of the Gulf were fairly sparsely populated before their recent oil-fed population boom, and hardly militarily formidable, and I'd think the regions environment makes it just about the worst possible place to stage an insurgency.
It's possibly one of the best considering the current civil war in Yemen in addition to history. And the Bedouin fame as desert raiders is something that's always a threat to settled powers, be they Arabs, westerners, or whatever.
The climate being what it is, whomever rules the area is likely to rely on third world labour much as the Gulf states have done OTL, though perhaps they'd use slaves rather then guest workers. As for the local Arabs, if they're not eliminated through genocide and exodus they're likely stuck on slave wages or as literal slaves alongside the imported labour.
This isn't exactly a traditional Westernization scenario I'll grant, but if the labour is imported from multiple sources then German or Italian is likely the territory's lingua franca. The regions management and permanently resident elite is likely to be of European origin as well.
Although didn't the Nazis admire the Arabs as well as Islam? The Nazis seem like people who would gladly make puppet states out of the region, putting in charge some sympathetic locals, to get the oil out of the ground. There did exist pro-Axis elements amongst Arab nationalists, after all. And while Hitler was not the most intelligent person, even he and his administration could see that by giving the "oil sheikhs" a bit of the revenue, it would be better invading the place and constantly having to hold it down against rebels and sabotage.
Aborigine population was densest in Queensland, probably 1/4 of the entire population was up there. However I was thinking places like the Condah Swamp which because of extensive stone weirs supported several thousand people 9 months of the year in houses with stone bases/lower walls and wood framing. If initial contact was for trade rather than settlement then the locals could adapt many European practices prior to settlement and not get overrun when settlement does occur.
Condah Swamp and the Gunditjmara were barely anything compared to what the American Indians had, and the American Indians had the advantage of going against Europeans far less advanced and more splintered (as in, multiple nations frequently at war to play off each other) than the Aboriginals ever did. And both indigenous peoples utterly, utterly lost, although I'd argue the Aboriginals lost worse considering the state of their rights in Australia versus American Indian rights in the US/Canada. Not getting into Latin American Indians for obvious reasons considering their superior technology/agriculture compared to those of the US/Canada.
There's further not much the Aboriginals have to offer that the Europeans might like, aside from a few interesting spices. Aside from that, offering food (their other good offering) is just going to make things worse for them in the long run. And European sheep and pigs do not help when they destroy traditional sources of food, meaning you spark the conflict that will destroy them, or at least finish off the people disease doesn't destroy. Really, European settlers could probably do most any job better, at least in the eyes of a European monarch.