Britain’s likely next prime minister, Andy Burnham, is set to confront one of the most consequential energy policy decisions in recent UK history.
Burnham is expected to take office in July if he remains unchallenged by Labour Party colleagues, inheriting a fierce debate over North Sea oil drilling versus renewables.
The debate has intensified following disruption to oil flows through the Strait of Hormuz, one of the world’s most critical energy chokepoints, after the Iran conflict erupted.
US President Donald Trump has already inserted himself into UK domestic politics, blaming outgoing Prime Minister Keir Starmer’s resignation on what he called a “failed” energy policy.
The global supply squeeze has reignited longstanding questions about Britain’s energy independence, echoing the shock that followed Russia’s war in Ukraine.
At the heart of the dispute are the Rosebank and Jackdaw fields in Scottish waters, two major projects that could meaningfully boost UK domestic supply but carry significant climate implications.
UK Finance Minister Rachel Reeves is understood to privately support new drilling, while Energy Secretary Ed Miliband has argued the priority should be clean energy investment instead.
Miliband, who could move to replace Reeves as finance minister under a new government, represents a significant faction within Labour that is resistant to expanding fossil fuel extraction.
Two of the UK’s largest trade unions, Unite the Nation and GMB, are actively campaigning in favor of new drilling, warning that blocking it would destroy thousands of jobs across the sector.
Scotland’s First Minister John Swinney told CNBC that the situation demands a careful reassessment of the country’s energy balance amid mounting geopolitical pressures.
“We are going to have to utilize oil and gas for some years to come,” Swinney said, adding that supply uncertainty driven by the Iran conflict represents a serious material factor for policymakers.
“We’ve now got uncertainty over jet fuel because of the conflict in the Middle East, and that will affect the ability of our economy to function,” Swinney told CNBC.
Swinney also pointed to the closure of the Grangemouth oil refinery in April 2025 as a stark illustration of the UK’s growing import dependency, noting it had been “a source of production of jet fuel.”
The closure of Grangemouth, once Scotland’s largest refinery, came with the loss of hundreds of jobs and left the country reliant on imported jet fuel at precisely the wrong moment.
Business leaders across the UK have argued that the compounding shocks from Iran and Ukraine make domestic production a matter of national economic security rather than purely a political choice.
Burnham must now define his position quickly, with energy markets already reacting to uncertainty over which direction the incoming Labour leadership will take the country.
