Looking at how supply shocks affect the cost of living and raise questions about the future of energy security in the UK.
In February 2026, The Strait of Hormuz was effectively shut by Iran after the US and Israel attacked the country and killed its Supreme Leader, Ali Khamenei. The strait is a vital chokepoint for the global supply of oil and gas, and the resulting supply shock drastically increased the price of both, affecting the cost of living in the UK and across the world, prompting a broader question over the UK’s energy security and the best way to insulate ourselves from future shocks like this. As Andy Burnham’s new comms-savvy government decides whether to allow new production at the Rosebank oil field and the Jackdaw gas field, we must wonder just how good their messaging can be to distract from the fact that these fields will not contribute to the UK’s energy security or make energy cheaper for people in the UK.
In August 2026, Ofgem announced that their price cap on energy bills will increase by 4% from October 2026, stating that “This increase reflects higher wholesale gas prices as a result of the ongoing conflict in the Middle East, with volatile global gas markets remaining the dominant driver of price changes”. Although this seems like a small number, it affects how much energy companies can charge, thereby affecting people’s wallets more obviously than other price rises. Ofgem did state that the cutting of VAT on energy bills by Andy Burnham’s government prevented the average bill rising by a further £45.
Despite this policy change and its positive messaging, Burnham is hamstrung by the nature of the shock. A VAT cut is helpful in the short-term and can be communicated to the British public with ease, but Burnham is unable to renew supply lines through the Strait of Hormuz (nor would he likely be able to in any such situation) to reduce the price of crude oil and liquified natural gas (LNG). So, what can be done?
One common argument today is for the government to allow the development of Rosebank oil field in the North Atlantic, and Jackdaw gas field in the North Sea. The general position is that any fossil fuels available to us must be exploited to protect the UK from future supply shocks and to keep our energy bills down. This is immensely misleading. The oil extracted at Rosebank would be refined in the Netherlands and sold on the international oil market, where the UK can purchase it – subject to the same kind of price fluctuations of recent months. Jackdaw, however, would be connected to the UK network and therefore contribute somewhat to the country’s energy needs.
From a purely economic perspective (omitting details of the terrifying effects of the climate crisis we have observed across Europe this year), continued fossil fuel exploitation is estimated to cost the UK 3.3% of GDP by 2050 if sustained at its current rate, so these developments represent a worrying sacrifice of long-term growth for short-term benefit.
Evidently, the argument for more drilling in the Atlantic and the North Sea for the sake of energy security or economic gain does not hold water, but unlike his response to the Hormuz crisis, Burnham is not strictly limited to short-term fixes on the energy question.
Renewable generation represents a sustainable growth opportunity, while global growth is projected to drop to its lowest level since the COVID-19 pandemic, largely due to weaker performance by countries dependent on energy imports in the wake of the Hormuz closure.
Burnham’s government has already proved it can communicate policy effectively, but no amount of flashy comms can hide the fact that Rosebank and Jackdaw represent a fundamentally futile solution to the problems we face around energy. The infrastructure we adopt today will determine how we handle the climate crisis and future energy shocks, and Burnham’s government must reckon with that before it’s too late.
Disclaimer: all information in this article is accurate and up-to-date as of 29 August 2026.
Iran, Oil, And The Energy Question: What’s Next For UK Energy Security?
Looking at how supply shocks affect the cost of living and raise questions about the future of energy security in the UK.
In February 2026, The Strait of Hormuz was effectively shut by Iran after the US and Israel attacked the country and killed its Supreme Leader, Ali Khamenei. The strait is a vital chokepoint for the global supply of oil and gas, and the resulting supply shock drastically increased the price of both, affecting the cost of living in the UK and across the world, prompting a broader question over the UK’s energy security and the best way to insulate ourselves from future shocks like this. As Andy Burnham’s new comms-savvy government decides whether to allow new production at the Rosebank oil field and the Jackdaw gas field, we must wonder just how good their messaging can be to distract from the fact that these fields will not contribute to the UK’s energy security or make energy cheaper for people in the UK.
In August 2026, Ofgem announced that their price cap on energy bills will increase by 4% from October 2026, stating that “This increase reflects higher wholesale gas prices as a result of the ongoing conflict in the Middle East, with volatile global gas markets remaining the dominant driver of price changes”. Although this seems like a small number, it affects how much energy companies can charge, thereby affecting people’s wallets more obviously than other price rises. Ofgem did state that the cutting of VAT on energy bills by Andy Burnham’s government prevented the average bill rising by a further £45.
Despite this policy change and its positive messaging, Burnham is hamstrung by the nature of the shock. A VAT cut is helpful in the short-term and can be communicated to the British public with ease, but Burnham is unable to renew supply lines through the Strait of Hormuz (nor would he likely be able to in any such situation) to reduce the price of crude oil and liquified natural gas (LNG). So, what can be done?
One common argument today is for the government to allow the development of Rosebank oil field in the North Atlantic, and Jackdaw gas field in the North Sea. The general position is that any fossil fuels available to us must be exploited to protect the UK from future supply shocks and to keep our energy bills down. This is immensely misleading. The oil extracted at Rosebank would be refined in the Netherlands and sold on the international oil market, where the UK can purchase it – subject to the same kind of price fluctuations of recent months. Jackdaw, however, would be connected to the UK network and therefore contribute somewhat to the country’s energy needs.
From a purely economic perspective (omitting details of the terrifying effects of the climate crisis we have observed across Europe this year), continued fossil fuel exploitation is estimated to cost the UK 3.3% of GDP by 2050 if sustained at its current rate, so these developments represent a worrying sacrifice of long-term growth for short-term benefit.
Evidently, the argument for more drilling in the Atlantic and the North Sea for the sake of energy security or economic gain does not hold water, but unlike his response to the Hormuz crisis, Burnham is not strictly limited to short-term fixes on the energy question.
Renewable generation represents a sustainable growth opportunity, while global growth is projected to drop to its lowest level since the COVID-19 pandemic, largely due to weaker performance by countries dependent on energy imports in the wake of the Hormuz closure.
Burnham’s government has already proved it can communicate policy effectively, but no amount of flashy comms can hide the fact that Rosebank and Jackdaw represent a fundamentally futile solution to the problems we face around energy. The infrastructure we adopt today will determine how we handle the climate crisis and future energy shocks, and Burnham’s government must reckon with that before it’s too late.
Disclaimer: all information in this article is accurate and up-to-date as of 29 August 2026.
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