Tensions over Iran have "spooked" global oil prices, US President George W. Bush said on Tuesday. Opec member Iran, the world's fourth biggest oil exporter, is locked in a diplomatic stand-off with the West over its nuclear program.
Uncertainty over the fate of 15 British sailors and marines seized by Iran on March 23 in the northern Gulf has also caused jitters in the oil market, sending US crude futures above $68 a barrel to the highest level in more than six months last week.
"The price of crude oil is on the rise because people get spooked for example when it looks like there may be a crisis with a crude oil producing nation like Iran," Bush told reporters.
Bush was responding to a question on US retail gasoline pump prices, which have risen for nine straight weeks to average $2.71 a gallon, according to US government figures.
Bush said "a variety of reasons" have pushed gasoline prices up, including taxes and specialised fuel blending requirements that make it hard to ship gasoline between regions to respond to shortages. "A lot of the price of gasoline depends on the price of crude oil," Bush said.
Markets have been on edge for months because of a dispute between Iran and the UN Security Council over Iran's nuclear program. But US futures prices fell nearly $2 to below $64 on Tuesday after Britain and Iran said they are willing to solve the row over the seizure of British military personnel diplomatically.
Analysts say it would be difficult to replace the roughly 2.5 million barrels per day of oil exported by Iran. Iran also borders the strategically important Strait of Hormuz, the entrance to the Gulf from the Arabian Sea and conduit for two-fifths of globally traded oil.