FX.co ★ UK to stop explorations for new oil fields soon

The UK is seriously considering placing a ban on the exploration of new oil deposits. In fact, ministers are currently discussing ending the term of present licenses by 2040 and not issuing new ones, even temporarily. Of course, all these have environmental motives as the UK intends to abandon fossil fuels and increase the share of energy from renewable sources. More specifically, Britain plans to become a completely carbon-neutral country by 2050.

According to experts, this issue will likely be resolved positively. It has already received warm approval from Greenpeace activists who support the end of the era of fossil fuels. Aside from that, the UK government has more than once expressed its priorities, which have a predominantly "green" tinge.

Back in December 2020, Prime Minister Boris Johnson announced that in ten years, the United Kingdom is going to reduce greenhouse gas emissions by at least 68%. The target is to bring the country on the path to zero indicators, and this should happen no later than 2050.

Experts believe that this goal is very much achievable, since under the Paris Climate Agreement, the UK has already cut carbon emissions more than other countries. However, it also has a negative effect in terms of the economy.

A possible ban on exploration for new oil fields could affect certain states negatively. For example, Scotland's labor market will suffer since it currently accounts almost 40% of the 270,000 oil-supported jobs in the United Kingdom. Obviously, the North Sea, where the UK plans to end its oil exploration, plays a very significant role in the region.

A ban could also affect oil prices, especially Brent crude. However, this is not the first time that a country decided to prioritize the environment instead of its economy. Last year, Denmark decided to completely stop its exploration and oil production in the North Sea. For comparison, in 2019, Denmark was producing 103,000 bpd while the UK produced 1.7 million.