Aberdeen’s post‑boom contraction raises questions about North Sea transition and local economy

Aberdeen’s economy has shown signs of long‑term contraction as the North Sea oil and gas sector shrinks and stores, offices and public facilities close, residents and politicians say. Reported job losses, higher local unemployment and a fall in average house prices have intensified a political debate over the future of fossil fuel production and the pace of the energy transition.

Industry observers, local residents and opposition politicians say hundreds of fields are expected to close and that tens or hundreds of thousands of jobs are at risk as investment in the UK sector slows. Critics have also pointed to government decisions on licensing and net‑zero policy as factors that complicate the region’s economic outlook.

Local economic indicators cited in reporting show rising strain. Unemployment in Aberdeen has been reported at 4.3%, higher than the Scottish average, and Office for National Statistics data cited by local media put the city’s June average house price at about £142,000 — roughly the same level as in 2007 and substantially below the 2014 peak of about £212,000. Local charities and community groups are operating food banks across the city, and a number of major retailers and hospitality venues have closed their Aberdeen locations in recent years.

Longstanding names that have exited the city include John Lewis, which closed in 2021, Debenhams in 2020 and a Marks & Spencer store after more than eight decades, along with the recent closure of BrewDog’s flagship Aberdeen pub in July. The Beach Leisure Centre was closed by the council in 2023, and the former Shell headquarters near the commercial port has been demolished. Some local attractions have also been affected: Doonies Rare Breeds Farm was reported to have closed to make way for an "Energy Transition Zone," a term used for redevelopment intended to support low‑carbon industries.

The scale of expected reductions in production varies by source. The notes cited here say around 180 of the UK's 280 current oil and gas fields could shut over five years; other observers give different figures. Conservative politicians have used those projections to press for renewed drilling. Conservative leader Kemi Badenoch, speaking in Aberdeen, warned that up to 200,000 jobs across the sector are in danger and urged renewed exploitation of the remaining UK‑territorial reserves, saying up to 7.5 billion barrels could still be produced from UK waters.

Scottish Conservative figures echoed that view. Russell Findlay, leader of the Scottish Conservatives, said the party would defend the livelihoods tied to oil and gas in the north‑east of Scotland. Badenoch accused the government of "strangling the North Sea" through what she called an ideological pursuit of net zero and called for policies to restore investor confidence and protect jobs.

Residents and former offshore workers described a palpable change in the city’s day‑to‑day life compared with the oil boom decades. Former rig engineers and long‑term residents described heavy reductions in pay in the 1990s and the cumulative effect of business departures since the mid‑2010s, when a global oil‑price slump began to weigh on local investment. A number of people interviewed described empty shops on Union Street and an increase in charity and vaping shops replacing national chains.

Community organisations say economic inactivity is a persistent problem. One report cited that roughly 21.6% of working‑age residents in Aberdeen were economically inactive — around 39,500 people — a figure that local agencies say contributes to demand for emergency food provision and other support services.

The economic shift has unfolded alongside broader energy‑sector changes. The UK has pursued policies to meet net‑zero greenhouse gas emissions targets, and ministers have restricted new licences for fossil‑fuel production; opponents say that has added uncertainty for local supply chains and investment. Supporters of the transition argue that long‑term planning and investment in renewables and low‑carbon industries are necessary to meet climate commitments and to create new employment, and that local redevelopment such as energy transition zones can support that shift.

International developments have also been invoked in the debate. Recent reports of new oil discoveries in the Norwegian sector of the North Sea have been cited by those advocating more drilling in UK waters, while other analysts note that new discoveries do not directly alter the carbon‑budgeting and policy choices facing the UK.

Local and national policymakers face a balancing task: managing the immediate social and economic effects in communities reliant on oil and gas while pursuing national and global climate commitments. Aberdeen’s recent trajectory underlines the political and economic tensions involved in that transition and the differing views about how quickly and by what means to shift the energy mix.

Officials and industry groups continue to discuss plans aimed at supporting affected workers and attracting new investment, including projects tied to offshore wind and low‑carbon industries. The extent to which such measures can replace jobs and economic activity lost from oil and gas will be a central issue in regional economic planning and national energy policy debates in the months and years ahead.