‘Military Move on Iran Could Triple Oil Price’

WASHINGTON, 21 June 2006 — World oil prices could triple if the diplomatic standoff over Iran’s nuclear program escalates into a military conflict, Saudi Arabia’s ambassador to the United States said yesterday.

“The conflict itself ... will shoot up the price of oil astronomically,” Prince Turki Al-Faisal said at a press conference. “We think military conflict would be counterproductive in Iran.”

“The whole Gulf will become an inferno of exploding fuel tanks and shot-up facilities,” Al-Faisal said.

Oil traders have been worried that Iran, OPEC’s second biggest oil producer, may halt exports if there is an escalation in the dispute over the Islamic republic’s nuclear program.

Tehran has yet to respond to an offer made by world powers to end the standoff, but said on Sunday a “positive atmosphere” had been created that could help resolve the argument.

The country holds 10 percent of the world’s proven oil reserves and also has the world’s second largest natural gas reserves after Russia, according to the USEnergy Information Administration.