US could deal with Iran cutting oil exports-Bodman

WASHINGTON, June 20 (Reuters) The United States would be in ''good shape'' with enough emergency oil supplies if the West's dispute with Iran over its nuclear program caused Tehran to cut its oil exports, U S Energy Secretary Sam Bodman said today.

''I believe we are in reasonably good shape and would be in reasonably good shape by making use of our Strategic Petroleum Reserve'' if Iran supplies were to cut exports, Bodman told reporters. The U S emergency stockpile holds almost 700 million barrels of crude oil.

Saudi Arabia's ambassador to the United States said today that world oil prices could triple if the diplomatic standoff over Iran's nuclear program escalates into a military conflict.

Assuming oil prices were at current levels near 70 dollar a barrel at the time of an attack, ''You would see that (oil price) perhaps double or triple as a result of the conflict,'' Prince Turki Al-Faisal said at a press conference hosted by the United States Energy Association.

Bodman said the Energy Department had not specifically studied the impact of military action on oil supplies.

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.

U S President George W Bush continues to emphasize diplomatic efforts, although he has declined to rule out military options should talks fail.

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

REUTERS PDS BST0343