From the North Sea oil fields: contrasting Norwegian and British oil and gas policies and their consequences

In a report released by EY at the end of 2024, the situation in Aberdeen and Aberdeenshire was described as follows: Aberdeen city and neighboring Aberdeenshire will continue to struggle. The consultancy stated that since 2010, Aberdeen has lost nearly 18,000 jobs—equivalent to 10% of its 2010 workforce—primarily due to the ongoing decline of the local oil and gas industry. EY believes that "Aberdeen’s outlook remains closely tied to the energy sector," forecasting growth between 2024 and 2029 to remain below the Scottish average. According to the Q2 UK Northeast Quarterly Economic Survey, jointly conducted by the Aberdeen & Grampian Chamber of Commerce and law firm Gilson Gray LLP, business confidence in the Northeast has fallen to its lowest level since the pandemic, as the sharp downturn in North Sea activity—directly resulting from the increase in petroleum and natural gas operating tax to 78%—is damaging the overall economy of Aberdeen and Aberdeenshire. Russell Borthwick, Chief Executive of the Aberdeen & Grampian Chamber of Commerce, stated: "The UK economy cannot abandon the North Sea—or the thousands of businesses across the region that depend on it." Findlay Anderson, Partner at Gilson Gray LLP, commented: "The energy profits levy, coupled with rising employment costs and policy volatility, is creating an environment where businesses feel unable to plan ahead." (II) UK Business Leaders Urge Government to Scrap the Oil and Gas 'Windfall Tax' In response to the severe impact of the windfall tax on the oil and gas sector, UK business leaders have called on the government to act and abolish the tax. On October 2, 2025, London-based business news outlet City A.M. published an article titled "UK Business Leaders Urge Government to Scrap Oil and Gas Windfall Tax" on the website Petroleumprice.com. The British Chambers of Commerce stated that the windfall tax has reduced investment, undermined business confidence, and placed the UK at a competitive disadvantage; businesses are calling for a new, stable fiscal regime linked to oil and gas prices, alongside clearer regulations governing North Sea development. The Conservative Party proposed scrapping the Labour government’s net-zero climate legislation in favor of an "Energy-First" strategy prioritizing affordable and reliable supply. Major UK industrial firms stated that Chancellor of the Exchequer Rachel Reeves should eliminate the windfall tax levied on North Sea oil and gas producers. In a newly released report outlining corporate budget proposals, the Chancellor was urged to prioritize cutting business energy costs and to develop a more explicit plan for transitioning the North Sea toward supporting renewable energy. The British Chambers of Commerce—one of the UK’s largest and most influential industry organizations—stated that the energy profits levy imposed on major companies such as BP and Shell has reduced investment and eroded business confidence. The organization noted that this tax places the UK at a "competitive disadvantage," and layoffs by North Sea oil producers indicate that the tax’s scheduled expiration in 2030 is "far too long to wait." Businesses are calling on the government to replace the current levy with "a new, stable fiscal regime proportionate to changes in oil and gas prices," and to establish clearer regulatory frameworks governing development and drilling.

Collective suffering! Saudi Arabia deploys its ultimate weapon—Britain and the EU wail in unison!

Financial markets reacted most directly: on September 15, Brent crude closed at USD 108.75 per barrel and WTI at USD 105.83—both marking new closing highs since mid-May. Heating oil futures surged 5.36% in a single day, while diesel futures hit a record settlement price. On the physical side, benchmark European crude cargo prices soared above USD 120 per barrel—up nearly USD 15 from a week earlier—and even at such high prices, securing reliable supplies remains uncertain. Freight rates are likewise soaring: tanker freight from the Gulf of Oman to China has surged to 4.5 times the benchmark rate—a historical record—with this cost inevitably passed on to end consumers. Analysts’ warnings point to deeper concerns. Goldman Sachs views attacks targeting oil infrastructure as signaling a significant escalation in Middle Eastern conflict, raising the possibility of Brent exceeding USD 120. Bank of America estimates that, if supply constraints persist through year-end, extreme scenarios could push oil prices toward USD 150. Market capital is rapidly flowing into WTI as an alternative benchmark, foreshadowing European refineries shifting procurement toward U.S. crude to fill the gap. As oil prices rise, so do European refining costs and refined product prices—reigniting inflationary pressures that had yet to be fully tamed. Old wounds remain unhealed; new ones are already inflicted. V. Europe’s Vulnerability: Why the UK and EU Are Hit First The crisis’s shockwaves are not evenly distributed but strike Europe’s most fragile points with surgical precision. The UK’s position tightened first. North Sea oil output has declined year after year; domestic crude production has long been insufficient to meet demand, with Saudi crude accounting for roughly 20% of UK imports. More critically, there are compatibility issues: many UK refineries were specifically designed around the characteristics of Saudi medium-sulfur crude. Switching feedstocks on short notice risks lowering yields—or worse, forcing unplanned shutdowns and maintenance. Any supply reduction immediately pushes up retail gasoline and diesel prices, simultaneously raising both transportation and winter heating costs for households. The EU’s predicament is even more precarious. Following the Russia-Ukraine conflict, the EU imposed a maritime ban on Russian crude oil, leaving a persistent supply gap that has long relied on Middle Eastern producers—Saudi Arabia being the most critical supplier. Now, with Saudi Arabia cutting supply, the gap has shifted from a "paper risk" to an actual supply disruption. If pipeline repairs truly take five to eight weeks, Europe’s energy supply will remain stretched throughout the entire fourth quarter—the very period when heating demand peaks and winter stockpiling is essential. Poland’s state-owned refiner Orlen responded fastest, already scouring the spot market for alternative supplies—but such emergency purchases come at steep cost: a USD 15-per-barrel spot premium is merely the entry ticket, and whether sufficient volumes can be secured remains highly uncertain. With winter heating season fast approaching, persistently high oil prices threaten to derail Europe’s anti-inflation efforts—and public discontent may rise in tandem with utility bills. VI. America’s Silence and Saudi Calculations Behind the crisis lies another layer worth close reading: great-power maneuvering. Over the past month, U.S.-made air defense systems—lavishly deployed by Saudi Arabia—have repeatedly failed against Houthi drones and missiles, with most incoming targets breaching the interception net. Saudi Arabia has repeatedly appealed to the United States for direct military intervention—requesting U.S. airstrikes on Houthi launch sites or additional deployment of air defense units to protect oil infrastructure. Yet Washington has remained restrained: neither dispatching fighter jets for deep-strike missions nor reinforcing air defenses—offering only verbal condemnation and intelligence sharing.

Strikes by North Sea oil workers could ‘severely disrupt’ UK fuel supplies

just now

Unite union warns that planned strikes by Apache oil workers in the North Sea could severely disrupt UK fuel supplies via the Forties pipeline. The industrial action stems from failed pay negotiations, potentially affecting critical infrastructure during a period of rising global energy prices.

theguardian

2026-10-04

Apache Workers Back Strike That Could Disrupt North Sea Forties Oil Pipeline, Union Says

2026-10-05

Strikes by North Sea oil workers could ‘severely disrupt’ UK fuel supplies

Strikes by North Sea oil workers could ‘severely disrupt’ UK fuel supplies

FAQ