Burnham faces early North Sea oil test as UK energy risks rise
The likely next UK prime minister is under pressure to pick a course on North Sea drilling as oil supply worries collide with climate goals.
By Priya Nair · Economy Reporter
· 3 min read
Andy Burnham could inherit a fast-moving energy fight if he becomes the U.K.’s next prime minister: approve more North Sea drilling, or put more weight behind renewables. For investors watching energy costs, U.K. stocks and oil-linked funds, the decision matters because domestic supply policy can feed into fuel prices, industrial costs and confidence around the country’s energy security.
CNBC reported that Burnham, described as Prime Minister Keir Starmer’s likely successor, may need to set out his position quickly as markets respond to global supply stress. Burnham is set to become prime minister in July if Labour Party colleagues do not challenge him, according to CNBC.
The pressure has intensified after disruption linked to the Iran war affected oil flows through the Strait of Hormuz. A chokepoint is a narrow route that carries a large share of a commodity, so trouble there can affect prices well beyond the region. CNBC described the Strait of Hormuz as one of the world’s most important oil chokepoints.
The U.K. debate also follows the energy shock caused by Russia’s war in Ukraine, which sharpened concerns about imported fuel and national resilience. Business leaders argue that producing more oil and gas at home would help address those risks, CNBC reported.
North Sea projects sit at the center of the dispute
The Rosebank and Jackdaw fields in Scottish waters have become key tests for U.K. policy. CNBC reported that the projects could increase domestic supply, while also putting pressure on climate commitments.
The political split runs through the government. CNBC reported that U.K. finance minister Rachel Reeves is understood to privately support new drilling. Energy Secretary Ed Miliband, who CNBC said could be in line to replace Reeves as finance minister under a new government, has argued that the U.K. should focus on clean energy.
Labor groups are also pushing Burnham toward oil and gas. CNBC reported that Unite the Nation and GMB, two of the U.K.’s biggest trade unions, are campaigning for drilling because they fear restrictions would hurt sector jobs.
U.S. President Donald Trump has also entered the argument, blaming Starmer’s resignation this month on what he called a “failed” energy policy, according to CNBC.
Scotland adds jobs and fuel security to the equation
Scotland’s First Minister John Swinney told CNBC that policymakers need to adjust the balance between supply security and climate goals. “There is a changing balance that’s got to be struck,” Swinney said.
He added that oil and gas will remain part of the system for years. “We are going to have to utilize oil and gas for some years to come. If there is uncertainty about the security of supply, or security of supply is undermined because of exorbitant cost of the effects of the conflict in Iran, these are material factors that have got to be borne in mind,” Swinney told CNBC.
The closure of the Grangemouth oil refinery in April 2025 has become a symbol of that tension. CNBC reported that the facility, once Scotland’s largest refinery, shut with the loss of hundreds of jobs.
Swinney said Grangemouth had produced jet fuel, leaving Scotland more exposed to imports after the closure. “We’ve now got uncertainty over jet fuel because of the conflict in the Middle East, and that will affect the ability of our economy to function,” he told CNBC.
This story draws on original reporting from CNBC Economy.
