With the global economy rebounding, thanks to an increase in the number of COVID-19 vaccines and the easing of restrictions related to the pandemic, demand for crude oil grew faster than supply. In this regard, in 2023, oil prices in the world increased by almost 70%. Let’s check the situation of UK oil production vs consumption in the article below.
The situation with oil production and consumption in the UK
About half of the area of the island of Great Britain is made up of separate parts of sedimentary basins: the southern part of England and Wales is part of the Paris basin, the central and northern parts of the country, together with southern Scotland, are part of the North German basin. Oil is produced mainly in the fields of Central England and in small quantities in Dalkeith (southern Scotland).
The British government planned to abandon the issuance of licenses for oil and gas production in the North Sea but intends to continue licensing new fields due to rising energy costs. Oil and gas now account for about three-quarters of Britain’s total “energy needs,” so despite the decision to eliminate harmful emissions to the atmosphere by 2050, it was decided to continue issuing licenses for the development of deposits in the North Sea.
The search for oil was carried out in a number of geological regions. In the southern counties, which are part of the Parisian sedimentary basin, Mesozoic deposits were the object of the search. In central and northern England, as well as in the lowlands of Scotland, which form the north-western extension of the North German Basin, the main part of which is located in Germany and the Netherlands, there were significant prospects for new discoveries.
Falling global oil stocks: sharp price trends and the crisis in Britain
Great Britain is a large consumer and a significant producer of energy resources. Among the main economically developed countries, it is the only net exporter of energy. In the XIX and the first half of the XX centuries, coal was exported, and now oil and oil products. In the structure of the energy balance of Great Britain, the shares of coal, oil, and natural gas are almost equal.
The current situation and prognosis of the UK oil production and consumption come down to the following facts:
- The UK government lifted the moratorium on shale gas production in England and confirmed its support for a new oil and gas license round.
- Lifting the moratorium will help the shale industry unlock UK natural gas in quantities sufficient to meet UK needs in the coming decades.
- High inflation will sharply reduce the purchasing power of the British and intensify the economic recession, as well as push the Bank of England to further tighten monetary policy.
Due to the lack of exploration activities due to lack of funding, own gas production in the UK is falling. Natural gas from fields in the North and Irish Seas is not enough to supply the country, making it dependent on imports. After limited investment and few new fields since the pandemic, UK producers have started to bring new wells on stream, helping boost domestic gas production by 26% in the 1st half of this year. Exports to continental Europe have risen to record levels in recent months.