Gary Smith of the GMB said knocking back all future licence requests would be seen as an "attack" on Scotland.
Keir Starmer is reportedly considering the mith policy as a way of meeting&nbsp;the country's climate change commitments.
Smith, the Edinburgh-born general secretary of the GMB, told the Record a ban could derail the Scottish Labour revival under Anas Sarwar.
He said: "If Labour don't get off the hook, the political fallout will be really significant across&nbsp;Scotland. You've got tens of thousands of workers whose jobs will be impacted. Without a shadow of a doubt, it will cost Labour seats in Scotland.
"This is utterly incoherent in terms of economic thinking." Smith, whose union makes sizable donations to Labour, praised Sarwar by saying he was "getting into his stride" as leader and also gave the thumbs up to Starmer: "They just need to get themselves off this stupid hook around oil and gas."
He said of a ban on new oil and gas projects: "I think it would be pretty catastrophic for the oil and gas industry and for investor confidence in the UK. That position from the party is just plain wrong."

'Stupid' oil ban ‘will cost Labour seats'

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{{magzter}} is the World's largest and fastest growing self-service, cross-platform digital newsstand with over 87 million users since its inception in 2011 and thousands of magazines and newspapers across 40+ categories and 60+ languages. Headquartered in New York, Magzter has its local presence in Amsterdam, London, Mexico City, Chennai, Mumbai, New Delhi, Bengaluru, Singapore, and will soon be expanding to other countries. Founded by global entrepreneurs, Girish Ramdas and Vijay Radhakrishnan in June 2011, Magzter enables magazine and newspaper publishers around the world to create and deliver digital editions of their titles to global consumers.