A war in Iraq could take the price of oil as high as US$50 (RM190) a barrel, Prime Minister Dr Mahathir Mohamad warned today as he prepared to take over the chairmanship of the 114-nation Non-aligned Movement (NAM)

Mahathir also believes the United States would fan the flames of international terrorism by leading an attack o­n Iraq and has made it clear that he will attempt to steer the NAM into declaring strong opposition to war at its summit here.

"Oil prices, I believe, can go up to about US$50," he told a news conference after the Umno Supreme Council meeting.

"If you attack Iraq and Iraq were to see defeat, the possibility is that they will burn all the oil fields as they did in Kuwait.

"That will create a shortage of oil. The price will go up."

Jittery market

US crude oil prices broke above US$37 a barrel for the first time in 29 months yesterday as the prospect of a war in Iraq instilled fear in world markets.

Mahathir, who has taken a characteristically punchy line o­n the Iraq crisis as he assumes his last major role o­n the world stage, pointed out that Malaysia as a net oil exporter would benefit.

"Fortunately for us in Malaysia, we have oil also. If the price of oil goes up by o­ne dollar, we gain by US$54 million.

"On the other hand a country like Japan, fortunately very rich, the rise in the price of oil by o­ne dollar will cause it to lose three billion dollars.

"Other countries are less fortunate because not o­nly are they not rich but they don't have oil." AFP