US President Donald Trump has criticised the UK’s taxation policy on North Sea oil, describing it as a “TREASURE CHEST” for the country. In a post on Truth Social, Trump suggested the UK could benefit significantly from its oil reserves near Scotland, where he recently opened a new golf course at the Trump Turnberry estate in Aberdeenshire.
Trump stated: “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.’ Incentivize the drillers, FAST. A VAST FORTUNE TO BE MADE for the UK, and far lower energy costs for the people!”
Chancellor Rachel Reeves has implemented further tax increases on oil giants by raising the windfall levy on oil and gas companies, extending it to 2029. The UK currently imposes an energy profits levy at a rate of 38 per cent, alongside ring-fenced corporation tax, a supplementary charge, and petroleum revenue tax. The ring fence prevents profits from North Sea oil and gas from being offset by losses in other activities.
These combined levies result in a headline tax rate of 78 per cent on North Sea oil and gas activities, with several companies warning of adverse impacts on jobs and investment. Taxes on oil and gas revenues are expected to generate approximately £5.2bn in the next year.
The UK government has consulted businesses on potential revenue taxation reforms, with changes likely to be introduced by the Autumn Budget. Trump’s remarks on high UK taxation may put pressure on Labour officials, including Reeves, who might need to raise taxes by up to £30bn later this year.
The government has recently considered further oil drilling in the North Sea, potentially reversing a legal decision in Scotland that blocked Shell and Equinor from exploring projects in Jackdaw and Rosebank. Shell estimates the Jackdaw field could supply 1.4 million UK homes, while Equinor claims the Rosebank project could contribute £25bn to the UK economy.
James Alexander, chief executive of the UK Sustainable Investment and Finance Association, argued that expanding drilling would have “no impact on energy bills” and could harm the UK’s green reputation with investors. He criticised Trump for his impromptu comments, stating, “The idea that North Sea oil is an untapped ‘treasure’ is just another false myth told about our heavily depleted reserves.”
