Reeves, UK's Reeves, says that the Middle East crisis makes predicting when the oil and gas profit levies will end difficult.

The British Finance Minister Rachel Reeves told oil and gas executives on Wednesday that it was harder to predict the end of a tax on their profit due to the conflict in 'the Middle East, but that she was committed to eliminating it.

Reeves spoke with representatives of the oil and gas sector, including BP and Adura. He also met with Offshore Energies UK and Offshore Energies UK, to discuss a sudden rise in energy costs following a U.S. and Israeli air strike against Iran.

The windfall tax, introduced in 2022 in response to the surge in energy prices after Russia's invasion in Ukraine, increased the effective tax rate for North Sea producers from 78% to 78%.

"The Chancellor was very clear in her communication with the industry about her desire to end the Energy Profits Levy. After the meeting, a government official said that she 'has made this promise and stands by it.

It is important that we react to the crisis in the Middle East, which has real-time effects on oil and gas price.

Once oil and gas prices drop below certain thresholds that are updated regularly, the windfall tax will be disabled. Price spikes caused by the Iran conflict make such a move unlikely.

Cornwall Insight predicts that the next price cap in July will increase by 10%, wiping away the?savings made by the government last year.

Reeves' last budget, in November, was adamant that the Energy Profits Levy would be ended in 2030. This snuffed out the hopes of British North Sea Oil and Gas Producers for an earlier termination.

Treasury said that "(Reeves), emphasised her keenness to give certainty to the sector on this front, but she also highlighted that geopolitical developments create an uncertain context for making policy decisions."

(source: Reuters)