15th September 2026
Britain's offshore energy industry continues to make a substantial contribution to the economy, supporting around 245,000 jobs and generating £36.7 billion in economic value each year, according to the 2026 Economic Report from Offshore Energies UK.
But the report also delivers a warning. As domestic oil and gas production declines, the UK is becoming increasingly dependent on imported energy at a time when international markets are being disrupted by geopolitical events.
OEUK estimates that more than 40% of the UK's energy needs are now met by imports. In 2025, the UK spent a net £84 billion on imported oil, gas and electricity, equivalent to around 2.8% of GDP.
The report argues that the issue is not whether Britain will continue to consume energy. It will. The question is whether more of that energy is produced domestically or imported from elsewhere.
That argument has become more significant following the conflict in the Middle East. OEUK points to disruption around the Strait of Hormuz and continuing volatility in global oil and gas markets as evidence of how quickly events overseas can affect British energy prices and security. Around 20% of global oil and gas supplies normally pass through the Strait.
Oil and gas production falling
The report accepts that the North Sea is a mature basin, but argues that its decline is not necessarily as rapid as current forecasts suggest.
UK oil and gas production has fallen dramatically from its 1999 peak. OEUK says production fell from around 4.5 million barrels of oil equivalent per day at the peak to about 1.1 million in 2025.
It also points out that the UK drilled no exploration wells last year, while Norway continues to award new licences.
OEUK's central argument is that fiscal and regulatory policy is now influencing investment decisions.
The organisation says that if the tax and regulatory framework were made more competitive and predictable from 2027, 111 additional projects could potentially be unlocked, attracting around £50 billion of private investment and producing an additional 3.25 billion barrels of oil equivalent.
These are industry estimates rather than government forecasts, so they should be treated accordingly. But they demonstrate the scale of the argument being put to ministers.
Renewables are growing too
The report is not simply an argument for continuing with oil and gas.
OEUK represents oil and gas, offshore wind, hydrogen and carbon capture and storage, and argues for an integrated offshore energy industry.
Offshore wind supplied almost 20% of UK electricity last year, generating 52 TWh, with almost 17GW of capacity installed. Another 8GW was awarded contracts in the latest allocation round.
But OEUK says development needs to accelerate if offshore wind is to make a much larger contribution to the overall energy system.
There is an important economic issue here.
Britain is electrifying transport, heating and parts of industry, which means electricity demand is expected to rise even though overall energy consumption has been falling.
Electricity demand increased for consecutive years for the first time in more than two decades, according to the report.
That means Britain faces the unusual challenge of reducing its reliance on fossil fuels while simultaneously needing considerably more electricity.
The industrial warning
One of the less obvious points in the report concerns British industry.
OEUK says UK industrial energy prices are now roughly 75% higher than the G7 average.
Industrial energy consumption has fallen to its lowest level for more than 50 years. While greater efficiency is part of the explanation, OEUK argues that the decline also reflects the loss of energy-intensive industrial activity from Britain.
That creates a difficult circle.
If British industry becomes less competitive because energy is expensive, production can move overseas. Britain may then import the products it previously manufactured, while still importing increasing quantities of energy.
What does it mean for Scotland?
For Scotland, the report has particular significance.
Much of the UK's offshore energy industry is concentrated around Scotland and the North Sea. Aberdeen remains a major energy centre, while the wider offshore supply chain extends throughout the north and east of Scotland.
The report also has implications for areas such as Caithness and the Highlands, where the future energy economy could involve a mixture of oil and gas, offshore wind, nuclear, hydrogen, carbon capture, grid infrastructure and supporting industries.
The North Sea is therefore not simply an oil and gas story.
The bigger question is whether Britain can retain the skills, infrastructure and investment generated by the offshore energy industry while moving towards a lower-carbon energy system.
OEUK argues that it can.
Its central message is that Britain should not abandon one energy industry before the next generation of energy infrastructure is fully established.
That is a legitimate argument, although it comes from an organisation representing the offshore energy industry and should therefore be read with that perspective in mind.
Nevertheless, one point is difficult to ignore.
Britain is going to need large amounts of energy for decades to come.
The choice is increasingly about where that energy is produced, how secure the supply is, how much it costs and how many British jobs and businesses benefit from producing it.
The North Sea may be declining as an oil and gas province, but the economic report argues that its wider role in Britain's energy future is far from finished.
Read the full report at https://oeuk.org.uk/product/economic-report-2026/