Britain has made a “grave strategic error” by turning its back on the North Sea, a top economist has warned, after Israel’s attack on Iran sent the price of oil and gas surging.
Simon French of Panmure Liberum said ministers had shown “folly” for failing to maximise the gas supply from the North Sea.
European gas prices have climbed as much as 6.6pc today over concerns Iran could respond to Israel’s attacks by disrupting the vital trade route through the Strait of Hormuz.
Brent crude jumped by as much as 13pc overnight to more than $78 a barrel – its biggest intra-day gain since the early days of the Ukraine war in March 2022 – as uncertainty ramped up in global markets.
Mr French said Britain was “unnecessarily exposed” in the event the turmoil leads to higher demand for Norwegian or US liquefied natural gas, even though the US has lowered its reliance on Qatari imports in recent years.
He said: “If Iran retaliates by disrupting the Strait of Hormuz it will bring into sharp relief for the UK the folly of not maximising its domestic gas supply from the North Sea.”
He added: “For a government that has made welcome (long term) progress this week on stable nuclear baseload, the inability to look at the short term security of supply from the North Sea looks like a grave strategic error.”
Mr French’s comments come on a day of volatility in global markets, sending gold back towards its record high and pushing up the price of oil.
Israel killed Iran’s chief of the military staff General Mohammad Bagheri as part of a wave of strikes on Iran, including at Tehran’s enrichment facility Natanz.
Iran said it would launch a “harsh and decisive” retaliation, pushing the price of oil higher and wiping out its losses so far this year.
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