The UK government has published a new factsheet titled ‘Iran, the Middle East and UK energy’ detailing how it has limited ability to shield itself from wild swings in global oil and gas prices, no matter how much domestic production it squeezes from the North Sea.
The factsheet reads: “The price of oil and gas is determined by international markets, not the UK; the UK is a price-taker, not a price-maker.”
This phrase, echoed by Energy Secretary Ed Miliband in recent parliamentary debates, highlights the UK’s vulnerability in a highly interconnected global system.
Even though direct imports from the region are modest, only about 1% of the UK’s gas supply came from Qatar in 2025, with no major shifts expected, the knock-on effects are immediate and severe.
Domestic production offers little buffer
Global events trigger spikes in wholesale prices, which feed straight into UK bills. Recent surges in gas futures illustrate how quickly market jitters translate to higher costs for households and businesses.
The UK operates within a single, integrated European and global gas market. Events thousands of miles away, such as potential blockades in the Strait of Hormuz or attacks impacting Gulf facilities, ripple through pricing benchmarks like the UK’s National Balancing Point (NBP) and European hubs.
Britain lacks the scale to dictate terms; it must buy at whatever the world market demands.
Notably, the North Sea is a maturing basin, contributing less than 0.7% of global oil and gas output. “Future exploration in the North Sea is too marginal to make a difference to the overall supply in an international market,” the factsheet notes.
New licences or extended field life via Transitional Energy Certificates won’t move the needle on prices paid by British consumers.
Wholesale gas costs remain elevated compared to pre-2022 levels, and any sustained disruption risks pushing the energy price cap higher, potentially by significant margins if volatility persists into summer.
The government insists UK gas supplies remain secure, thanks to diverse sources such as North Sea output, Norwegian pipelines, European interconnectors, and LNG terminals.
But security of supply doesn’t equal price stability.
The “biggest threat to UK energy security,” per the factsheet, is “continued reliance on unstable fossil fuel markets.”
A shift from fossil fuels
The prescribed solution is a rapid shift away from that reliance on fossil fuels.
The government touts its “biggest ever investment in British history” in clean, homegrown power – record renewables auctions (offshore wind now 40% cheaper than new gas plants), consents for wind and solar to power 8.5 million homes, and the largest nuclear build programme in 50 years.
“The only route to energy security and sovereignty for the UK is to get off our dependence on fossil fuel markets, whose prices we do not control, and on to clean home-grown power that we do control,” Miliband has argued.
Short-term relief measures remain in place. The energy price cap protects households until July (with a 7% or £117 drop expected in April), alongside Budget support averaging £150 off bills, the Warm Home Discount, and the £15 billion Warm Homes Plan for insulation and upgrades.
Yet the factsheet is also clear.
Until Britain decisively decouples from volatile international fossil fuel pricing – through accelerated electrification, renewables dominance, and reduced gas dependency – energy costs will remain at the mercy of distant geopolitics.
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