U.S. President Donald Trump has launched a stinging rebuke of the United Kingdom’s current tax regime on North Sea oil and gas operations, arguing it deters investment and contributes to rising energy costs.
In a post on his Truth Social platform Friday, Trump accused the UK government of embracing “costly and unsightly windmills” at the expense of vital fossil fuel development.
“There’s a century of drilling left, with Aberdeen as the hub.
“The old-fashioned tax system disincentivizes drilling, rather than the opposite.”
President Donald Trump
His comments come as Britain continues to grapple with balancing energy security and its net zero commitments.
In its 2024 budget, Prime Minister Keir Starmer’s Labour government raised the windfall tax on oil and gas producers, increasing the effective tax rate on North Sea operations to 78% and extending the levy through March 2030.
The tax, originally introduced in 2022 by the Conservative government, was designed to target extraordinary profits during the global energy price spike following Russia’s invasion of Ukraine.
However, the industry has pushed back. Oil and gas companies have warned that the tax makes the UK less attractive compared to international alternatives.
Earlier this month, Harbour Energy Plc, one of the UK’s largest producers, announced a review of its domestic operations, citing the fiscal environment. The review is expected to result in about 250 job losses.
“The government’s current stance is accelerating the decline of the industry.
“Frequent changes to tax rules create instability, deterring long-term investment.”
Jim Johnson, CEO of oilfield services firm Hunting Plc
Despite the criticism, recent forecasts from the North Sea Transition Authority (NSTA) paint a more nuanced picture. Following better-than-expected performance in 2024, the regulator has raised its investment and production outlook for the coming years.
The government maintains that existing fields should continue to be utilized throughout their lifespan while phasing in greener alternatives.
Political Undercurrents
Trump’s remarks align with the energy platform of Reform UK, a right-wing political party led by Nigel Farage, a longtime Trump ally.
The Financial Times recently reported that Reform UK is actively courting oil and gas companies with pledges to reduce taxes and restore drilling incentives in the North Sea.
This isn’t the first time the U.S. president has taken aim at Starmer’s energy policy. Earlier this year, Trump described the UK’s windfall tax as “a big mistake,” urging Britain to “open up the North Sea” and “stop punishing success.”
Britain’s oil and gas output has declined steadily over the past two decades, hitting new lows in 2024. The sector has faced not only fiscal challenges but also regulatory uncertainty.
Starmer’s government has pledged to end new exploration licenses, a move environmental advocates have welcomed but which industry leaders argue stifles innovation and growth.
In the meantime, the UK has committed to achieving net zero carbon emissions by 2050. As part of this plan, the government aims to fully phase out Russian energy imports and reduce fossil fuel reliance by 2030, with a focus on wind, solar, and hydrogen technologies.
The future of the North Sea remains a contentious topic as Britain weighs the twin imperatives of energy security and climate goals.
While Trump’s comments are unlikely to directly influence UK policy, they amplify the voices of domestic critics who argue the current approach jeopardizes jobs, investment, and national energy resilience.
As Britain moves toward its legally mandated net zero target by 2050, the tension between fiscal policy, environmental responsibility, and economic pragmatism will remain at the heart of the national debate.
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