Published by Global Banking & Finance Review®
Posted on March 4, 2026
3 min readLast updated: April 2, 2026
Add as preferred source on GoogleUK Chancellor Rachel Reeves will meet oil and gas executives amid surging energy prices tied to the Middle East conflict, reaffirming plans to replace the Energy Profits Levy with a more stable regime to safeguard both consumers and the industry.
LONDON, March 4 (Reuters) - British finance minister Rachel Reeves on Wednesday told oil and gas executives that the conflict in the Middle East had made it harder to predict when a tax on their profits would come to an end, but that she was still committed to removing it.
Reeves met with representatives from the oil and gas industry, including BP, Adura, and Offshore Energies UK to discuss a sharp rise in energy prices following a U.S.-Israel air offensive against Iran.
Introduced in 2022 after a surge in energy prices following Russia's invasion of Ukraine, the windfall tax on the country's oil and gas industry raised the effective tax rate on North Sea producers to 78%.
"The chancellor was clear with industry that she wants the Energy Profits Levy to come to an end. She has made that promise and she stands by it," a government source said after the meeting.
"The crisis in the Middle East has had real-time consequences on oil and gas prices and it is right that we respond to this."
The windfall tax is disabled once both oil and gas prices fall below certain thresholds, which are regularly updated. The price spikes due to the Iran conflict makes such a move less likely to happen.
This week’s price shocks have already raised the prospect of higher energy bills for consumers, with Cornwall Insight forecasting the next price cap from July will rise 10%, wiping out savings announced by the government in last year’s budget.
In her last budget in November, Reeves held firm on ending the Energy Profits Levy in 2030, squashing hopes of British North Sea oil and gas producers for an earlier end to the levy.
"(Reeves) emphasised her keenness to provide certainty to the sector on that front, but she highlighted that geopolitical events create a more uncertain context for policy decisions," a Treasury statement said.
(Reporting by Alistair Smout, Susanna Twidale, Shadia Nasralla and Sam Tabahriti, writing by William James; editing by Paul Sandle)
British finance minister Rachel Reeves is meeting with oil and gas companies to discuss consumer and industry support.
The spike in energy costs was caused by the conflict in the Middle East.
Rachel Reeves remains committed to ending the current energy profits levy and replacing it with a more permanent regime.
Reeves is examining ways to protect everyday people from the downstream impact of rising energy costs.
Reeves stated her plans for reforming energy sector taxes remain unchanged.
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