This Is Why Why the world’s missing oil leaves Britain on a 'cliff edge'
Mar 31, 2026
Ed Conway, Sky News data and economics editor, explains why a 20 million barrel daily oil shortfall is shaking global markets. He outlines how Britain’s import dependence, diesel vulnerabilities and refinery limits amplify pain. He discusses policy options like tax cuts, targeted relief and the political risks of rising bills.
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Unprecedented Global Oil Shortfall
- Global oil supply fell from about 100 million barrels per day to roughly 80 million because Gulf production is offline, creating an unprecedented 20 million barrel gap.
- Even after maximum emergency measures (stock releases, pipelines), we're still short ~8 million barrels a day, larger than any interruption in history.
UK Vulnerability From Being An Energy Importer
- The UK is an energy importer so international oil shortages directly raise domestic prices for petrol, diesel and heating fuels.
- Higher import dependence means price rises abroad transmit rapidly into UK consumer costs and inflationary pressure.
Tax Cuts Reduce Prices But Risk Increasing Demand
- Fuel taxation (fuel duty and VAT) makes up a very large share of pump prices in the UK, so cutting taxes is an available lever.
- Economists warn cutting prices can increase demand and worsen shortages, which is why some governments hesitate.