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EXPERT COMMENT

The US-Israel attacks on Iran have triggered a global energy supply shock more severe than those of 1973, 1979 and 2022 put together, according to the head of the International Energy Agency. 

Following Iran’s closure of the Strait of Hormuz, shipments of oil and liquefied natural gas (LNG) from the Gulf have been reduced to a trickle. Over 60 oil and gas facilities across the region, including major plants like Ras Laffan Industrial City in Qatar, have been damaged.

This has resulted in an acute supply-demand imbalance, causing prices to surge. Countries which depend heavily on oil and gas – like the UK – feel the most pain when prices go up.

There is substantial domestic oil and gas production in the UK, although the country is a net importer. International firms like BP, Shell and ExxonMobil operating in UK waters extracted quantities of oil and gas equivalent to around half of UK consumption in 2025. 

This production close to home has a benefit in securing energy supply – clearly, at present, it’s preferable to have gas flowing through a pipeline under the North Sea than sequestered aboard ships in the Gulf. But it offers little relief from high oil and gas prices – which are decided by the international market. 

Oil accounts for 37 per cent, and gas 38 per cent, of the UK’s total energy supply. This means that fully three-quarters of the energy on which the UK depends day-to-day is exposed to developments in the Gulf. What can be done to improve the UK’s position?

Click here to continue reading the full version of this Expert Comment on the Chatham House website.