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Donald Trump has taken aim at the UK’s “high” taxes on North Sea oil and gas, which he said “make no sense” and that the government should instead “incentivise” fossil fuel production.
The US president said in a message on his Truth Social website on Tuesday that North Sea oil could be a “treasure chest” for the UK, if the Labour government was to “incentivize the drillers, FAST”.
Trump made his intervention in UK politics as he visited Aberdeenshire, the home of North Sea oil production, to open one of his golf courses.
“North Sea Oil is a TREASURE CHEST for the United Kingdom. The taxes are so high, however, that it makes no sense. They have essentially told drillers and oil companies that, ‘we don’t want you’,” Trump posted.
Trump had travelled to Aberdeenshire on Monday alongside UK Prime Minister Sir Keir Starmer, whose government has previously said that current plans for global oil and gas production were “not compatible” with the drive to limit global warming to below 1.5 degrees.
The Labour government raised a levy on oil and gas profits — first introduced amid a jump in prices in 2022 — to 38 per cent in October, up from 35 per cent.
The move led to a headline tax rate for North Sea oil and gas companies’ activity of 78 per cent.
“Incentivize the drillers, FAST. A VAST FORTUNE TO BE MADE for the UK, and far lower energy costs for the people!” Trump added in his message.
Trump’s comments came as the UK government weighs its approach to the North Sea.
The industry has said that high taxes and insufficient investment allowances are causing unnecessary job losses and an exodus of offshore engineering expertise and supply chains.
With the UK requiring oil and gas as part of its energy mix on the pathway to net zero emissions by 2050, prioritising domestic output over imports is also more environmentally friendly, the industry added.
In a letter to Starmer last week ahead of his meeting with Trump, David Whitehouse, chief executive of industry group Offshore Energies UK, said the UK would need 13bn-15bn barrels of oil and gas by 2050, adding that “with the right policies the North Sea can meet half of this demand”. But instead the UK is “breaking records for energy imports”, leading to higher emissions, fewer jobs and lower tax revenues.
Environmental groups have countered that there are minimal gains from boosting production from the mature UK continental shelf, arguing instead for more renewables.
Tessa Khan, executive director of climate campaign group Uplift, said: “Trump’s demand for more drilling is pure fantasy — it will do nothing to provide us with an affordable supply of energy.
“Trump is cheerleader-in-chief for an oil and gas industry that has made obscene profits while millions of people here have struggled with unaffordable energy bills.”
She added that since oil and gas is sold into a global market, extra production from the North Sea would not be enough to bring down prices.
In his meeting with Trump on Monday, Starmer said oil and gas would be part of the UK’s energy mix including renewable and nuclear energy. The UK government has ruled out licenses for new oil and gas exploration.
Industry groups are also calling for UK chancellor Rachel Reeves to reduce the tax rate in the autumn statement.
