Claims that expanding North Sea oil extraction would significantly reduce household energy bills have been dismissed as “sheer fantasy” by researchers from the University of Oxford.
New analysis from the university’s Smith School of Enterprise and the Environment found that increased domestic drilling would provide only minimal financial relief for British households.
The findings come as families face renewed pressure on energy costs following disruption to global oil and gas markets linked to tensions in the Strait of Hormuz.
Energy markets have been unsettled by conflict involving Iran, contributing to volatility in global fuel prices.
Anupama Sen, the co-author of the study and head of policy engagement at the Smith School, said: “The idea that draining the North Sea would make the UK more energy secure or significantly save on household bills is sheer fantasy.”
The report directly challenges arguments from campaigners and politicians who argue that increasing domestic oil and gas production would help reduce energy costs.
Researchers said that fully exploiting the remaining reserves in the North Sea would deliver annual savings of between £16 and £82 per household.
However, the report said even these modest reductions would only occur if the Government redistributed all tax revenues from fossil fuel companies directly to households.
Without such a policy, the study said consumers would see “no discernible benefit” because oil and gas prices are largely determined by international markets.
Exploiting remaining North Sea reserves would save households as little as £16 a year
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Dr Sen added: “We show that regardless of the remaining lifetime of North Sea oil and gas, a ‘drill baby drill’ approach to extraction would actually cost households more money versus continuing on our path to clean energy.”
The research suggests that a transition to a fully renewable energy system could provide significantly larger savings.
According to the study, household energy bills could fall by between £105 and £441 each year under a renewables-based system.
They also highlighted potential savings from switching to heat pumps.
Households replacing gas boilers with the pumps could save around £330 annually due to their higher efficiency.
Exploiting remaining North Sea reserves would save households as little as £16 a year, analysis says
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PADr Sen said: “Heat pumps are particularly important for reducing bills because they are much more efficient than gas boilers.”
She added that heat pumps typically produce around three units of heat for every unit of electricity used, while gas boilers generate less than one unit of heat for each unit of gas consumed.
The Government has responded to the recent rise in global energy prices by accelerating plans to expand renewable energy generation.
Ministers have also indicated they may introduce measures to help households with fuel costs, including scrapping planned increases in fuel duty.
The Government has announced that plug-in solar panels designed for balconies and outdoor spaces will be made available in Britain for the first time.
An earlier auction for renewable electricity contracts has also been scheduled.
But the Tories and Reform UK have both called for expanded North Sea drilling and a rollback of some net zero policies, including subsidies for renewable energy and heat pumps.
Donald Trump has also long criticised wind power – and has urged Britain to increase oil and gas extraction from the North Sea.
Reform UK has called for expanded North Sea drilling and a rollback of some net zero policies
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GETTYThe researchers noted that while renewable technologies could deliver significant savings, achieving these benefits would require substantial upfront investment.
Cassandra Etter-Wenzel, another co-author of the study, said: “Achieving this requires upfront investment especially for heat pumps and insulation and therefore depends on effective subsidy and financing mechanisms, particularly for low-income households.”
The report also noted that its calculations were based on energy prices recorded in January, before the latest market disruption linked to tensions in the Middle East.
As a result, the researchers said the projected savings from renewable energy may represent a conservative estimate.