Brent Crude reached $71 a barrel, a rise of more than 30 per cent year-on-year, amid expectation that global supplies could be tightened by escalating conflict in Libya and US-backed sanctions taking effect in Venezuela.
“Brent prices increased more than 30% year-to-date as OPEC continued to cut supply for four months in a row and optimism over US-China trade talks helped to buoy the demand outlook,” US bank J.P.Morgan said in a briefing this week.
Rising prices in the longer term could mean increased profits for operators in the North Sea sector and increased tax receipts for the UK Exchequer.
Price increases are also likely to spark renewed political debate north of the Border between supporters of independence, who have long argued the economy of an independent Scotland could be underpinned by oil, and environmental activists firmly opposed to the continued use of hydrocarbons.
“Our oil sitting at $70 a barrel,” the SNP MP Douglas Chapman said in a tweet. “How can we utilise this resource to support our society, encourage us to transition swiftly to a green economy and build a fund to finance future tech? “Our stewardship of Scotland’s seas is the key. The last thing to do is to give it away to the UK.”
Last year, the SNP faced demands to apologise for the growing black hole in its 2014 economic prospectus for independence as the shortfall in oil revenues reached £30 billion.
Projections in the Scottish Government’s White Paper on independence were more than ten times bigger than estimated revenue from taxes on North Sea oil and gas production in each of the past three years.
Economic projections in the 2013 White Paper were based on Scottish Government models that predicted oil prices would be broadly stable for at least two years.
However, the price of crude oil plunged in the second half of 2014, as the independence referendum reached its climax, nearly halving from $112 per barrel in June to $58 in December.
The Scottish Greens said continued support for oil production would condemn the planet to “climate breakdown”.
Patrick Harvie told The Scotsman: “An economic plan for Scotland that is based on the price of oil is not only doomed to fail, but it condemns us all to climate breakdown. It’s time for the SNP to break its fossil fuel addiction and to work with us to deliver an urgent transition to a green post-oil economy that’s good for the planet and good for Scotland.”