Britain’s Burnham faces defining energy policy decision
Andy Burnham, the likely successor to British Prime Minister Keir Starmer, may face an urgent test in office: whether to expand drilling for North Sea oil or double down on renewables amid a global energy shock.
US President Donald Trump fueled the debate by blaming Starmer’s resignation this month on his “failed” energy policy.
Trump’s intervention comes as the Iran war has disrupted the flow of oil through the critical Strait of Hormuz, one of the world’s most important oil chokepoints.
The contraction in physical supply intensified the UK’s energy security and independence discussions after the shock of Russia’s war in Ukraine.
Business leaders argue that this is why domestic production is important.
But the political divide remains.
British finance minister Rachel Reeves is understood to have private support for the new drilling.
However, Energy Minister Ed Miliband, who could replace Reeves as finance minister in the new government, argued that the focus should be on clean energy instead.
Two of Britain’s biggest unions, Unite the Nation and GMB, are campaigning over concerns that blocking drilling would harm jobs in the sector.
Burnham, who will become prime minister in July unless she is opposed by her Labor colleagues, is under pressure to quickly adjust her position based on market reaction.
At the center of the debate are the Rosebank and Jackdaw fields in Scottish waters, two major projects that could increase the UK’s supply but test climate targets.
This adds to the pressure in Scotland, where First Minister John Swinney told CNBC: “There is a shifting balance that needs to be struck.”
“We will have to use oil and gas for the next few years. If there is uncertainty about security of supply or security of supply is weakened due to the prohibitive cost of the effects of the conflict in Iran, these are material factors to keep in mind,” he told CNBC.
In a move symbolizing the UK’s energy transition, Grangemouth oil refinery, once Scotland’s largest, closed in April 2025 with the loss of hundreds of jobs.
Swinney said the refinery “is a source of production for jet fuel, so we are now importing jet fuel due to the refinery closure.”
“We now have uncertainty around jet fuel because of the conflict in the Middle East, and that will impact the ability of our economy to function,” Swinney added.
