FACTBOX: Energy, commodities in focus as Burnham becomes UK PM

Andy Burnham replaced Keir Starmer as UK prime minister on July 20, after the ex-Manchester mayor swept to victory in the Makerfield by-election in June and ran uncontested for the leadership of the Labour Party.

The new PM has a challenge on his hands when it comes to energy and commodities, from the impact of the Iran war to balancing the energy transition with appeals from the North Sea oil and gas industry and the chemicals and metals sectors.

Burnham quickly moved net-zero champion Ed Miliband from the energy ministry to the foreign office, and appointed John Healey as chancellor. Oil industry insiders seeking a strategic pivot will be closely watching an upcoming decision on whether to approve the delayed Rosebank and Jackdaw oil and gas projects.

Policy

• Burnham is yet to lay out a North Sea oil and gas policy but promised in a recent speech to "safeguard sovereign manufacturing and production capability in critical sectors like steel, defense, energy, food and farming." Industry eyes were trained on his picks for chancellor and energy secretary, with Miliband accused of holding up key projects and pushing through exploration bans.
• The UK North Sea has seen international oil company exits and consolidations in recent years, driven partly by Energy Profits Levy, which raised the headline tax rate to 78%. That is due to be replaced by an Oil and Gas Price Mechanism in or before 2030.
• The government has signaled that its supportive policies on hydrogen and carbon capture and storage would continue under Burnham, though the sectors face further delays to key policy and funding decisions.
• The industry is still awaiting a delayed hydrogen policy update, first promised by the end of 2025, and the results of the second electrolytic hydrogen allocation round, while progress on a second round of CCS cluster funding has stalled.
• On metals policy, Burnham is likely to accelerate a radical industrial approach, with greater state involvement, tougher trade protection, and more support for strategic metals supply chains.
• Critical minerals efforts are also expected to expand through allied partnerships, focused on securing battery and defense metals.
• On carbon, the focus has shifted to whether the UK-EU Summit, originally scheduled for July 22, will proceed in the coming weeks, with London repeatedly identifying linking its carbon market with the EU Emissions Trading System as a priority for the meeting. That could drive gradual convergence between UK and EU carbon prices.
• In May, Starmer's government said it would abolish its Carbon Price Support tax on fossil fuel generators from April 2028, saying the levy had achieved its objective of driving coal off the grid and was no longer needed as the country's emissions trading system had matured. Analysts will be watching whether Burnham maintains this policy.
• Oil refiners are lobbying to be included in the UK's Carbon Border Adjustment Mechanism, which would impose emissions charges on foreign producers. The Treasury appeared to rule out a refining CBAM before 2028.

Infrastructure

• Burnham is expected to face early decisions on whether to give final approvals to the 70,000 b/d Rosebank oil field and the Jackdaw gas field, operated by Equinor-Shell joint venture Adura. The two fields, which could supply 10% of UK gas demand, have faced challenges from climate groups.
• Fields across the mature North Sea basin have seen significant declines in recent years, leading midstream players such as Ineos FPS to warn that sluggish output is jeopardizing the UK's pipeline infrastructure.
• On the downstream side, the UK today has just four refineries, compared to 19 half a century ago, with Grangemouth and Lindsey closing in 2025. The government is due to publish its revised strategy on the downstream oil industry in the autumn.
• On metals, the July 16 nationalization of British Steel reflects Labour's emphasis on the strategic importance of primary steelmaking. Core measures should also endure, including the July 1 steel safeguards, the UK's Carbon Border Adjustment Mechanism timetable, and support for electric arc furnace investment, such as for Tata Steel.
• Labour's Clean Power 2030 mission envisages a UK electricity system that is 95% low-carbon, with a 5% strategic reserve of gas-fired power plants. It includes quadrupling offshore wind, tripling solar and doubling onshore wind capacity.
• Starmer's government oversaw two renewable energy auctions during its tenure, awarding over 24 gigawatts of new capacity across the two rounds. The next auction, Allocation Round 8, opened for applications on July 20.
• UK power demand rose from 298 terawatt-hours in 2023 to 305 TWh in 2025, according to S&P Global Energy CERA analysts, who forecast demand growing to 352 TWh by 2030.
• Labour has also heralded a "new golden age" of nuclear power in the UK, committing to build the 3.3-GW Sizewell C plant and facilitating the roll-out of the country's first small modular reactors.

Flows

• Oil and gas still dominate the UK energy mix, with electricity only accounting for about 18.3% of primary energy in 2024, government data shows.
• UK oil and gas production has fallen precipitously this century, with oil output at 657,580 b/d in April, down from around 2.2 million b/d in 2001, according official data.
• The UK exported 584,000 b/d of crude in June, mostly to European refiners, and imported 360,000 b/d of refined products, according to data from S&P Global Commodities at Sea.
• Starmer's government delayed a ban on diesel and jet fuel made from Russian oil in third countries, but committed to end the temporary sanctions waiver from 2027.
• Gas production was 29.7 Bcm in 2025, compared to demand of over 60 Bcm, according to government data. LNG has helped compensate, with imports totaling some 8.7 Bcm through H1 2026, according to CERA data, up roughly 10% year over year.
• CERA analysts estimate that unabated gas will account for around 19% of domestic generation by 2030, rather than the targeted 5% under the clean power plan, but down from roughly 35% in 2023.

Prices

• UK crude grades Forties and Brent help underpin Platts Dated Brent, the world's leading physical crude benchmark, which was last assessed at $84.66/b on July 17, having soared beyond $144/b in April amid the Iran war.
• UK retail prices for gasoline jumped by more than one-fifth in the first two months of the Middle East conflict, while diesel prices rose by 36%. Prices have since eased, but remain around 15% above prewar levels at GBP150.53/liter for gasoline and GBP165.52/l for diesel, government data shows.
• Like the rest of Europe, UK gas prices have risen significantly in the past several weeks due to the resurging tensions in the Middle East. Since hitting a recent low in mid-June, the Platts-assessed UK NBP month-ahead gas price had gained some 46% as of July 17 when it was assessed at Eur55.86/megawatt-hour.
• On the power side, UK households and industrial users face some of the world's highest electricity bills, with Burnham – who favors greater public control of utilities – partly blaming privatization in the 1980s.
• Platts assessed UK baseload power for 2027 delivery at GBP92.16/MWh (Eur108.36/MWh) on July 17, above the benchmark German Cal 2027 contract, which has risen to the highest since 2023. From April 2028 onward, UK power is below German power due to the end of the carbon price support, with Summer 2028 last assessed by Platts at GBP63.35/MWh.
• UK carbon prices held steady July 20. UK Allowances were trading at GBP58.75/mtCO2e at 0810 GMT, down 0.08% from the previous settlement. Platts assessed UKAs for December 2026 at GBP58.81/mtCO2e on July 17, compared with GBP60.49/mtCO2e on June 19, days before Starmer handed in his resignation.
• A 5 pence fuel tax cut for diesel and gasoline is due to start being unwound from 2027, after repeated delays from successive governments. The tax cut was first introduced in 2022 in response to the Russia-Ukraine war, and last extended in May.
• On steel, Platts last assessed HRC in the UK on July 16 at GBP705/metric ton DDP West Midlands, stable week over week, but up GBP180/mt since the start of the year.