The US-Israel attacks on Iran have triggered a global energy supply shock more severe than those of 1973, 1979 and 2022 put together, according to the head of the International Energy Agency.
Following Iran’s closure of the Strait of Hormuz, shipments of oil and liquefied natural gas (LNG) from the Gulf have been reduced to a trickle. Over 60 oil and gas facilities across the region, including major plants like Ras Laffan Industrial City in Qatar, have been damaged.
This has resulted in an acute supply-demand imbalance, causing prices to surge. Countries which depend heavily on oil and gas – like the UK – feel the most pain when prices go up.
There is substantial domestic oil and gas production in the UK, although the country is a net importer. International firms like BP, Shell and ExxonMobil operating in UK waters extracted quantities of oil and gas equivalent to around half of UK consumption in 2025.
This production close to home has a benefit in securing energy supply – clearly, at present, it’s preferable to have gas flowing through a pipeline under the North Sea than sequestered aboard ships in the Gulf. But it offers little relief from high oil and gas prices – which are decided by the international market.
Oil accounts for 37 per cent, and gas 38 per cent, of the UK’s total energy supply. This means that fully three-quarters of the energy on which the UK depends day-to-day is exposed to developments in the Gulf. What can be done to improve the UK’s position?
Norway
It is tempting for those in the import-dependent UK to look enviously across the water to a northern neighbour. Norway meets all its oil and gas needs through domestic production. It then exports 10 times as much oil, and 25 times as much gas, to mainly European customers, including the UK.
You might assume that, given its extraordinary fossil fuel endowment, oil and gas would account for a large share of Norway’s energy consumption. In fact, it’s considerably less than in the UK: oil accounts for 28 per cent of energy supply, and gas a mere 14 per cent.
This is because Norway’s government has prioritized using electricity, rather than fossil fuels, to provide the ‘energy services’ – such as transportation, and warming homes – on which citizens rely in their daily lives.
Take heating: Most homes in Norway are heated not by burning gas in boilers, but by electric heat pumps – the result of sustained policy interventions.
When oil prices spiked by nearly 300 per cent due to the 1973 Arab oil embargo, Norway resolved to move away from oil for heating and towards electric resistance heating. Then, in the early 2000s, a period of elevated electricity prices prompted the government to promote the adoption of heat pumps, which had become significantly more cost-effective than resistance heaters.
Subsidies and grants to offset the up-front cost, and programmes to train a workforce of installers, were key to the widespread adoption that followed.
Technological improvements have continued, and today’s heat pumps are three to five times more energy efficient than the traditional gas boilers common in UK homes.
The wrong debate
Yet the UK energy security debate currently revolves almost entirely around whether to issue new licences for oil and gas exploration (which the current Labour government has said it will not do). The argument, made by President Donald Trump and others, is that the UK could reduce exposure to energy shocks by trying to exploit more of its fossil fuel resources.
But this is not a solution. The North Sea is a mature basin. Production on the UK Continental Shelf peaked in 1999, and it is estimated that as much as 90 per cent of its fossil fuels have already been extracted. Even Norway’s boom is coming to an end, with the government regulator forecasting peak production before 2030.
The UK’s reserves of oil and gas, as of 2020, stood at 0.1 per cent of the global total (Norway holds 0.6 per cent). Further extraction following the issuance of new licences, if it were to occur, would constitute a limited stay of execution. It would also deliver little in the short- to medium-term: new oil and gas projects take an average of 15 years to begin producing.
And focusing on the singular issue of licensing diverts attention from the most effective way of making the UK resilient to future energy crises: swapping oil and gas for electricity, just as Norway has.
The opportunity
There is enormous scope to permanently drive down the UK’s exposure to oil and gas shocks through electrification. At present, a comparatively small share of UK energy, around a fifth, is consumed in the form of electricity.
More gas is burned to heat British homes than for any other purpose, approximately 23 billion cubic metres (bcm) in 2025, accounting for 37 per cent of total gas consumption. Heat pump adoption is sluggish, with 24 heat pumps for every 1,000 households. In Norway, there are 662, the highest rate in Europe.
Over half of the oil that the UK uses each year – 32 million tonnes in 2024 – is consumed by cars and trucks, in the form of petrol and diesel. Electric vehicles (EVs) are beginning to push this down, but the share on the roads remains modest, at just under 6 per cent. In Norway, 32 per cent of passenger cars are fully electric.
And EVs accounted for 98 per cent of all new vehicles sold in Norway in the first three months of 2026. UK EV sales have grown in recent years, but still only account for under a quarter of new car sales.
There is, then, a clear energy security case for policies that encourage the rapid adoption of heat pumps and EVs. This will reduce the UK’s energy import dependency and blunt its exposure to volatile oil and gas prices – the ‘fossil fuel rollercoaster’ – all while improving air quality and reducing greenhouse gas emissions.
The challenges
This should not be mistaken for a simple solution, however. Installing a heat pump can be complex. Often it needs to be accompanied by insulation upgrades to ensure maximum efficiency. Up-front costs are considerable. And managing a declining gas distribution network will not be easy.
Norway also has significant structural advantages. The Norwegian state is the main shareholder in Equinor, the country’s dominant energy producer, giving it substantial oil and gas revenues to fund electric transitions. In contrast, UK oil and gas production was fully privatized in the 1980s.