UK domestic oil and gas production in the North Sea should continue alongside the expansion of offshore wind capacity to secure energy supply, according to an Offshore Energies UK (OEUK) report.

In its Business outlook report 2026, OEUK warns that the UK “urgently” needs to produce its own oil and gas because without it the country risks becoming reliant on “energy imports at a time of rising global instability”.

According to its analysis, oil and gas still supplies around 75% of the UK’s energy needs and is expected to meet around one-fifth of demand by 2050.

David Whitehouse, chief executive of OEUK, said: “This is not an either renewables or oil and gas scenario. We urgently need greater supplies of secure, domestically produced energy including oil and gas, which will remain a critical part of the UK energy system and economy for decades.

“As demand rises and electricity use accelerates, weakening domestic supply would only increase our reliance on imported LNG [liquified natural gas], leaving consumers more exposed to global volatility and higher emissions.” 

According to its analysis, the UK could rely on imported LNG for more than a quarter of its gas supply by 2030 and almost half by 2035 – up from around 14% last year. But with the right investment conditions and support for “pragmatic energy policies”, LNG reliance can fall to 6% in the same year.

It also said that North Sea gas has a lower emissions footprint than LNG from overseas and supports high-value jobs.

The industry group is calling on the government to back homegrown oil and gas and review its approach to exploration licences after last year’s ban. It claims that replacing the temporary energy profits levy in 2026 with the permanent oil and gas price mechanism could unlock up to £50bn of additional capital investment in oil and gas.

Whitehouse said: “To unlock investment, the UK needs a permanent tax regime that gives confidence to investors while protecting taxpayers when prices spike. The government’s proposed oil and gas price mechanism provides that balance.

“Implementing it is essential to reduce reliance on volatile imports, protect skilled jobs and supply chains and ensure the UK can decarbonise while keeping energy secure and affordable.”

However, the government remains steadfast on its stance on North Sea drilling. A government spokesperson told The Guardian: “Regardless of where it comes from, oil and gas is sold on international markets, which set the price for British billpayers – making us a price taker. The only way to truly protect ourselves from these price spikes is to get off the rollercoaster of fossil fuel markets.”

Two weeks ago a report from the Smith School of Enterprise and the Environment (Oxford Smith School) found that draining the North Sea of all oil and gas would cost households more than a fully renewable-powered UK. This is for the same reason highlighted above, that producing more oil and gas in the North Sea would not create the UK’s “own special supply”, nor could its price be set specifically for UK citizens as any new production would be sold on international markets at international prices.

Its analysis found that much larger savings would be gained from staying the course on clean energy. It argues this would result in recurring annual reductions in household energy bills and would render the UK truly energy secure for generations to come.