LONDON, Jan. 16 (UPI) -- The British economy relies too heavily on natural gas from Qatar, where shipments are in jeopardy because of Iran's regional threat, an analyst says.
Frank Harris, an analyst at energy consultant Wood Mackenzie, told the Financial Times that Japan, which gets nearly all of its oil and natural gas from imports, has a more secure energy sector than the United Kingdom because its supplies are diversified.
"(The United Kingdom is) incredibly dependent on Qatar from a liquefied natural gas perspective," he was quoted as saying. "If you are going to want to change that you are going to have to start contracting on a firm basis."
The newspaper notes mild winter temperatures are providing regional relief as more natural gas is held in storage. Yet, domestic production has declined about 6 percent per year since 2005 while natural gas imports from Qatar soared 67 percent from 2010 to 2011.
Iran has threatened to cut oil and natural gas deliveries through the Strait of Hormuz if backed into a corner, leaving the British economy with few options. Germany's Deutsche Bank estimates only one-quarter of LNG contracts from Qatar are secured under long-term fixed contracts, leaving the British economy vulnerable to market fluctuations.