The UK’s North Sea oil industry may have survived one of the darkest market downturns in history during the Covid-19 pandemic, but the deepest gloom lies over the future of the fossil-fuel industry.

Companies are braced for this week’s annual economic report from industry body Oil and Gas UK (OGUK). It is expected to lay bare the full toll of the pandemic on the ageing oil and gas basin last year.

This much we already know: the measures brought in to restrict the spread of the virus triggered the sharpest drop in oil demand ever recorded, leading to a plunge in global oil markets and a slashing of budgets across the world’s biggest oil companies.

In real terms, the global oil price fell to its lowest level since 2003. Its average price of $41.90 a barrel last year was more than a third down on the year before and almost 45% below the average over the past 20 years.

In the North Sea the impact was stark, even by OGUK’s own early estimates. It admitted earlier this year that activity in the North Sea had fallen to lows not recorded since the birth of the offshore oil and gas sector in the late 1960s and early 1970s.

There were only seven exploration wells drilled last year, the smallest number since 1965. The number of wells appraised and developed fell to lows not seen since 1970 and 1976 respectively, it said.

OGUK made it clear that the damage wreaked by the pandemic would continue to weigh on the basin for years to come. The North Sea’s oil and gas production fell to 1.61 million barrels a day in 2020, after a 7% slump in oil production, and it expects volumes to continue to fall – by between 5% and 7% a year this year and next year.

The industry group is expected to set out a picture of an embattled sector brought to its knees by market forces, but preparing to emerge – in time – as an important employer and industrial partner in the government’s net-zero ambitions.

What OGUK is less likely to admit is that perhaps the most important role it could play is not in promoting the North Sea’s economic benefits, but in prioritising the future of the basin’s workers in greener industries.

Existential questions have emerged for the legacy industry: the government has promised limits on new oil exploration; existing North Sea exploration plans have sparked political outrage; and the entire global conversation about oil and gas has changed. The International Energy Agency, which was initially established to ensure the security of the world’s oil supplies, warned earlier this year that no new fossil fuel exploration would be compatible with the world’s climate targets.

For the UK, as host of the UN climate talks in Glasgow this November, the decision on whether to allow exploration to go ahead at the Cambo oilfield is a key test of its climate leadership credentials.

Ed Davey, leader of the Liberal Democrats, would go a step further and tackle the industry’s financial support at its source. He told the Guardian his party would ban new listings of fossil-fuel companies on the London Stock Exchange, and prevent the issuing of new bonds to raise money for oil and gas projects. In the longer term, pension funds would disinvest from fossil fuels by 2035, and all companies with fossil fuel assets would be removed from the exchange by 2045.

The North Sea industry was devastated by the pandemic, but it may be time for it to accept that there is now no going back.