ssh-keygen uses OpenSSL to generate RSA keys and store it in PEM format. The encryption you are talking about is specific to PEM. If you look at your key file,
-----BEGIN RSA PRIVATE KEY-----
Proc-Type: 4,ENCRYPTED
DEK-Info: DES-EDE3-CBC,5B01E932988DC66B
EPESt4ZVIrxnQXxxWWVa7cCR+vgNZ/4vTu4mdq6pjaW7jMZoB8HV+mA745mQkQw7
i+YtdVs/JqOeyGiw/3McxYYKZTlhyh7MvfIr1n8ZdZmcjQz+oFqMxChFU3r8BGgA
“DEK-Info” header has all the information you need to decrypt the key as long as you know the passphrase. “DES-EDE3-CBC” means Triple DES (in EDE mode). CBC is the chaining mode. The hex number is the initial vector needed for CBC.
PEM is a very old format so it only supports DES/TripleDES. AES and Blowfish were added later on but not supported by all implementations. My ssh (OpenSSH 5.2) only supports DES and TripleDES.