Blog The escalation between the United States, Israel and Iran has done something very simple. It has reminded us how vulnerable the UK still is to events thousands of miles away. The moment tensions rose and shipping routes were disrupted, wholesale gas prices jumped 98 percent over the weekend, and Brent crude oil rose above $85 a barrel for the first time since July 2024. The latest analysis now suggests household bills to rise by around 10 percent from July 2026.
That single price spike has already wiped out the £150 of bill support that Rachel Reeves confirmed in the Spring Forecast only days ago. Much of that optimistic outlook already feels out of date.
The war has disrupted shipments through the Strait of Hormuz and caused spillover into Lebanon and the Gulf States. When that route is threatened, the entire global market tightens. Prices rise first. Households pay next.
This raises an uncomfortable point. If one regional conflict can push bills up again, how secure is our system really.
Any rise in oil and gas prices always triggers the same political row. Some argue that the Government made a mistake by scaling back new exploration in the North Sea and keeping the Energy Profits Levy in place. They say this has pushed investment away and will send tax receipts from a once thriving industry close to zero in the coming years.
In the last week alone, I have seen more and more people say that we must turn back to the North Sea and use our own reserves to protect ourselves. They frame this as the obvious answer to rising energy bills.
But it is not that simple.
I have worked on the case for a stable North Sea transition through the North Sea Transition Taskforce, back in 2024. It is clear the basin still has an important role to play in the UK for decades to come.
At the same time, I have also worked with companies building the future of our energy system. Nuclear. Battery storage. Hydrogen. Fusion. These are the technologies that shape what our energy security will look like in 20 or 30 years.
This is why the events of the last week matter. They do not just prompt the usual argument about drilling. They show that energy security is national security. Not in a slogan sense. In a real, practical sense. If our energy comes from elsewhere, then the stability of elsewhere becomes our problem.
It is not just the right making the argument anymore. Yes, parts of the Conservative Party and Reform will say the UK made a mistake by pulling back from exploration and keeping the Energy Profits Levy in place. They will argue that we should extract more from our own waters to protect households from global shocks, and they will blame Labour for decisions that they say have pushed investment away.
But Labour is now feeling the same pressure. Rachel Reeves has received sustained calls to rethink the Energy Profits Levy, and after speaking with North Sea representatives this week, it’s likely that the EPL will be removed before its expiration date.Her own party is also moving towards the view that the basin needs to be utilised more fully, especially in light of the recent price spike.
There is truth in saying the UK needs secure domestic supply. But the idea that we can simply drill our way out of global volatility is not convincing. Even if new exploration began tomorrow, it would not insulate us from international shocks. Oil and gas remain critical, but slowing down the pace of the transition would leave us even more exposed in the long run.
For me, the lesson is not that we must choose between development in the North Sea and investment in new technologies. It is that we need a genuinely British energy system that can withstand global shocks.
Nuclear gives us steady, always on power.
Wind and solar give us independence from international gas markets.
Storage smooths out the gaps.
And new technologies give us resilience and competitiveness.
The latest auction round for renewables already looks like a smart move from DESNZ, especially with oil and gas prices rising again. But renewables alone will not fix everything. We still have system costs and high electricity prices to solve.
The UK has a real chance to take first mover advantage in the technologies that will define the next generation of energy. If we stay consistent, we can attract both foreign and domestic investment into nuclear, storage, EVs, hydrogen and fusion, rather than watching that capital flow to the US, EU and/or China.
We also need to create the confidence for companies to invest here. That means clear policy signals, stable timelines and an environment where investors know the UK will not change direction every time global prices move. If we get that right, these technologies will not only strengthen our energy security but also lower costs for consumers over the long term.
If we want energy security, we cannot keep rowing back
If the UK wants long term protection from events like this, we have to accept that a proper energy mix takes time to build, and that every delay pushes us back into the volatility we are seeing right now.
We need to stay committed to the technologies that make us less reliant on global markets. We need a stable investment environment so the companies developing these future systems choose the UK and not somewhere else. And we need to stop treating every price spike as a reason to panic and reverse course.
The latest conflict has exposed the fragility in the system again. The question is whether the Government sticks to its guns.
