Balance of Trade

Indigenous oil and gas production has an important role in reducing dependency on imported fuel. The UK’s balance of trade in goods and services (i.e. the difference between exports and imports) was again in deficit last year by some £49 billion. The deficit would have been increased significantly, to around £78 billion, had it not been for the production of indigenous oil and gas. Calculation of the deficit reflects Oil & Gas UK’s assessment of the increase in oil price witnessed in 2007 compared with 2006.

The combined balance of trade in oil and gas (crude oil, oil products and natural gas) continued to be in deficit in 2007, but improved compared with the previous year. Crude oil production increased in 2007, although higher demand and less production boosted gas imports. The net deficit in crude, oil products and gas was, overall, reduced from £5.2 billion in 2006 to £4.5 billion last year.

Exports of oil-related goods and services (£4-5 billion in 2007) have also benefited the balance of trade. The expertise of the UK’s supply chain is now well established internationally. Its technology and competence (in particular, subsea) are sought after by oil and gas operators around the world. Overseas activity by companies based here continues to grow (see Section 3).