U.S. President George W. Bush urged OPEC nations during a visit to Saudi Arabia on Tuesday to put more oil on the world market and warned that soaring prices could cause an economic slowdown in the United States.
"High energy prices can damage consuming economies," the president told a small group of reporters travelling with him in the Mideast.
In a stern warning to Iran days after a Jan. 6 confrontation with U.S. warships in the Persian Gulf, Bush also put Tehran on notice that it needs to be careful.
The president said it would not matter to him whether an attack against an American vessel resulted from an order by the government in Iran or a rash decision by an Iranian boat captain.
"It's not going to matter to me one way or another," Bush said. "If they hit our ships, we will hold Iran responsible."
U.S. officials claim Iranian speedboats swarmed three navy warships in the Strait of Hormuz, the narrow waterway that is the only entry and exit to the Persian Gulf.
They said U.S. navy commanders were considering firing warning shots, before the retreat of the five Iranian speedboats, which the Pentagon said were operated by the elite Revolutionary Guards.
Iran has denied that its boats threatened the U.S. vessels, saying the incident was a normal occurrence, and accused Washington of fabricating video and audio it released. Iran's government has released its own video, which appeared to be shot from a small boat bobbing at least 100 metres from the American warships.
Bush spoke to reporters before meeting late Tuesday with Saudi King Abdullah, whose country holds the world's largest supply of oil. Bush said U.S. consumers are feeling the pain of rising oil prices, which topped $100 US a barrel this month.
"When consumers have less purchasing power, it could cause the economy to slow down," Bush said.
"I hope OPEC nations put more supply on the market," he added. "It would be helpful."
At the same time, he noted that the higher prices are guided by supply and demand, and that there is little excess capacity in the marketplace.
The Organization of Petroleum Exporting Countries next meets Feb. 1 in Vienna, Austria, to consider increasing output.