The impact of Brexit on the energy sector

The effects of Brexit on the global energy markets will likely be minimal. The most visible consequence of the Brexit vote in the immediate future is therefore on UK energy import costs.

Short-term: exchange rates

In the short-term the exchange rate affects both the upstream and downstream sectors, but in different ways. For the UK the most immediate effect of Brexit is increased energy costs due to a weaker pound. The loss is significant enough for effects to feed down the supply chain.

Medium-term: the business cycle

In the medium-term, and as the UK economy slows, we could expect energy demand to decrease, leading to price drops and consequences for the EU countries that export energy to the UK.

Long-term: labour mobility and skills

In the longer term decreased mobility and a shortage of skills, particularly in the upstream oil and gas sector, could be exacerbated when the UK leaves the EU.

Contact us

Jan Willem Velthuijsen
Chief Economist, PwC Netherlands
Tel: +31 (0)88 792 75 58
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Jeroen van Hoof
Partner, PwC Netherlands
Tel: +31 (0) 88 792 13 28
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