A recent analysis from investment bank Stifel confirms that North Sea gas saved the UK around £2.5 billion in 2025. This figure comes from relying on cheaper domestic offshore production rather than more expensive imported liquefied natural gas (LNG).

Analyst Chris Wheaton stated:

“Unsurprisingly – and we are frankly astonished that this has to be stated – the UK’s own North Sea gas is cheaper than imported LNG, and we estimate this saved the UK £2.5bn in 2025 alone.”

He added that savings are expected to be “substantially higher” in 2026 due to global LNG prices surging more than 50% amid the Persian Gulf conflict (including US strikes on Iran and retaliatory damage to Qatar’s Ras Laffan LNG plant, which supplies about a fifth of world LNG).

UK Gas Supply Breakdown:

• North Sea (domestic UK production): ~30–45% (declining from higher historical levels as the mature basin depletes; 2025 estimates vary by source but remain the largest single domestic contributor).
• Norway (pipeline imports): ~35–47%.
• LNG imports (mainly US, with others): ~15–21% (the rest of supply).

Domestic North Sea gas avoids the premium costs of LNG shipping, regasification, and global spot-market volatility. It also generates UK tax revenue, supports jobs (tens of thousands directly and indirectly), and enhances energy security while having a lower carbon footprint than distant LNG imports (domestic gas is nearly four times cleaner on a lifecycle basis per earlier NSTA analysis).

Domestic North Sea gas avoids the premium costs of LNG shipping, regasification, and global spot-market volatility. It also generates UK tax revenue, supports jobs (tens of thousands directly and indirectly), and enhances energy security while having a lower carbon footprint than distant LNG imports (domestic gas is nearly four times cleaner on a lifecycle basis per earlier NSTA analysis).

This analysis has resurfaced amid intense political debate over North Sea drilling. Opposition figures like Kemi Badenoch and even US President Donald Trump have urged more exploration (“drill, baby, drill”), while the Labour government shows mixed signals—Chancellor Rachel Reeves has expressed openness to projects like Rosebank and Jackdaw, but broader policy emphasizes renewables.

Stifel argues the current windfall tax (Energy Profits Levy) is too punitive, accelerating decline and risking higher future import dependence (potentially 85%+ of gas by 2030 without reform).

They claim tax tweaks could stabilise production, create more high-margin barrels, and even boost net tax receipts by £1–2bn/year through increased activity.

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North Sea gas ‘saves Britain billions a year’

Analysis comparing British resources with cost of imports will pile pressure on Ed Miliband to reverse drilling ban

North Sea natural gas has been found to have saved Britain billions last year, increasing pressure on the Government to boost production during the Iran war. The Telegraph has the story.

Tapping into its own resources of offshore gas instead of paying for imported liquefied natural gas (LNG) shipments saved the UK about £2.5bn last year, according to analysis from investment bank Stifel.

The bank said savings on UK-produced gas would be “substantially higher” this year because prices have surged during the Middle East conflict.

Gas prices have soared by 56pc since the start of the war as the threat of strikes has deterred tankers from passing through the Strait of Hormuz, where a fifth of global exports usually pass.

Meanwhile, missile damage at Qatar’s Ras Laffan plant, which produces a fifth of the world’s LNG, is expected to take three to five years to repair.

Stifel’s analysis will pile further pressure on Ed Miliband, who has banned new exploration in British waters and has so far rejected calls to extract more fossil fuels from the North Sea because of his net zero push.

The Energy Secretary has claimed that awarding new licences for North Sea drilling would do little to lower prices.

However, Chris Wheaton, an analyst at Stifel, said it was astonishing that ministers were not ramping up production of North Sea gas, asking: “Doesn’t the Government realise there’s a war on?”

“Unsurprisingly – and we are frankly astonished that this has to be stated – the UK’s own North Sea gas is cheaper than imported LNG, and we estimate this saved the UK £2.5bn in 2025 alone,” he said. “With the increase in global LNG prices due to the Persian Gulf conflict, we expect that amount will be substantially higher in 2026.”

The North Sea is still the UK’s biggest gas source, accounting for around 45pc of its supplies. The other 35pc comes from piped gas from Norway, while 20pc is LNG imports.

The Climate Change Commission has said Britain will still need oil and gas beyond 2050.

According to Stifel, this imported LNG has been, on average, 18p per therm more expensive than North Sea gas over the past few years, with this gap helping Britain save about £2.5bn in 2025.

“To minimise the cost of energy for the UK, the UK needs to maximise its own gas production,” Mr Wheaton added.

The Iran war has increased pressure on Mr Miliband to grant new licences for the Rosebank oil field and the Jackdaw gas field in the North Sea.

His opposition has prompted a growing backbench rebellion among Labour MPs, who are calling for a rethink of his net zero agenda.

Read the full story here.