As uncertainty over Iran drags on, global oil and gas prices are climbing rapidly. On Monday, April 6, a barrel of Brent crude traded at almost $109. That’s close to double the $60 it cost before the Middle East blew up. Prices have eased slightly as hopes grow that the fragile ceasefire might hold, and that Iran will loosen its grip on the vital Strait of Hormuz, through which a fifth of the world’s oil supply passes.
But even if the tankers start moving again, shortages are building. Drone strikes have knocked out oil and gas capacity, and weeks of disruption have created a massive global backlog. British motorists are paying the price. Unleaded petrol is heading towards £1.60 a litre and diesel has accelerated past £1.90. Household energy bills are forecast to jump by £288 from July to around £1,929 a year. They could leap again in October.
The UK economy has already stalled under Rachel Reeves and now risks sliding into stagflation or recession. Yet there is one bright spot. North Sea oil, the type Britain can produce, has just hit a record high. We should count ourselves lucky for once.
Brent crude reflects contracts for future delivery, but countries can’t wait. They want physical supply now. Forties Blend, the benchmark for North Sea oil that’s ready for use, has surged above $146 a barrel, according to Reuters. That’s the highest level since the run-up to the 2008 financial crisis. North Sea crude has become especially valuable because it’s accessible, reliable and close to key markets.
We’re sitting on a goldmine, in the middle of a gold rush. There’s just one small problem. His name? Ed Miliband. Britain finds itself with the only energy secretary in the world who thinks it’s sensible to hold back domestic oil and gas production in the middle of what may be the biggest energy shock in history.
Miliband argues that increasing domestic production won’t cut prices because oil and gas are traded globally. That’s true as far as it goes, but it’s also a sleight of hand. I quickly found five clear reasons to keep drilling.
First, more North Sea output would strengthen energy security. Second, every molecule of gas produced here goes straight into British homes, and there are 26 million boilers relying on it. Third, producing our own energy instead of importing it would improve the balance of payments, which has been weak for years. Fourth, it would support the pound. Fifth, it would generate around £2.5 billion a year in tax revenues, badly needed as public finances creak.
I’ve found a sixth bonus benefit. It’ll create well-paid jobs. And a seventh. One that should even satisfy Ed Miliband. It would cut our emissions by reducing reliance on more carbon-intensive imports.
Miliband and his acolytes reckon it’s only right-wingers like Nigel Farage and Kemi Badenoch who want us to access our own oil resources. That’s rubbish.
Labour’s very own Chancellor Rachel Reeves has indicated she wants the Jackdaw and Rosebank fields opened. And she’s not alone. Now Tony Blair has joined the calls for action. He argues that reaching net zero by 2050 will only be achieved through a more practical strategy focused on electrification, affordability and resilience.
Britain is sitting on a valuable resource during a global supply crisis, yet refuses to use it. Miliband prefers to showcase green credentials rather than apply common sense. But he won’t. Which is daft. But not as daft as our feeble PM Keir Starmer, who lets him get away with it. We’re a global joke, and it’s not at all funny.