The future of Britain's offshore oil industry hangs in the balance as losses mount and investment collapses.

A new report by Oil & Gas UK predicts that 43% of British oil fields in the North Sea will lose money this year if oil prices remain around $30 per barrel.

The trade association expects spending on new oil projects will fall below £1 billion ($1.4 billion) in 2016, compared to £8 billion ($11.3 billion) in a typical year.

"We are an industry at the edge of a chasm," said Deirdre Michie, CEO of Oil & Gas UK, in a statement.

Crude prices are currently trading around $33 per barrel after falling by about 70% since the summer of 2014.

The industry is awash with excess oil. Slowing demand growth, and the decision by OPEC -- led by Saudi Arabia -- to keep producing at near record levels, is keeping markets oversupplied.

Related: Oil investment weakest in 30 years

Saudi Arabia and Russia recently agreed to freeze oil output. But that agreement alone is unlikely to boost prices much in the near term.

Data from energy intelligence firm Rystad Energy shows it costs British producers about $52 to pump a barrel of oil, on average. Saudi and Russian average production costs are much lower, at $9.90 and $17.20 respectively.

Related: What it costs to produce oil

The U.K. oil industry has been partly sheltered from the price collapse by falling costs. And production actually rose in 2015, although revenues fell 30% to £18 billion.

Oil & Gas UK expects producers will cut costs further in 2016, but says they will also need tax breaks to stay competitive.

Michie urged the British government to cut taxes on the industry to support hundreds of thousands of jobs and ensure the country retains a secure supply of energy.

"We have a huge task ahead but the prize is worth fighting for," she said.