Monday, January 16, 2012

'Hormuz closure biggest problem for UK'

The Strait of Hormuz is vital to global trade

Source: Press TV

The closure of the strategic and vital shipping route Strait of Hormuz will cause Britain to lose up to a half of its gas imports, a report says.

The Daily Mail revealed on Monday that closing the Strait would block a trade route through which 46 percent of Britain's gas imports pass en route from Qatar, while 84 percent of the UK's Liquefied Natural Gas imports use the same route.

Tehran has said that it will react to Western oil sanctions against the country by choking oil flow through the Strait of Hormuz.

EU member states are scheduled to meet to discuss the proposed embargo on Iran's oil sector on January 23.

This is while Lord West, a former UK military chief, has warned that Britain would have to weather the economic fall-out should the closure occur.

"I have no doubt at all that this would be the biggest problem for us," the former head of the Royal Navy and security adviser to Gordon Brown, told the Financial Times.

The UK has increasingly relied on gas imports from Qatar since 2010 -- increasing the supply by 67 percent, according to the report.

Centrica, the parent company of British Gas, signed a three-year deal with Qatar for LNG supply in February 2011.

The report concluded that Britain's gas supply is at risk because it buys from such a narrow pool of suppliers and there is no viable export alternative for Qatar than the Strait, which carries one-fifth of the world's oil and one-third of its LNG.

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