Behrouz Mehri  /  AFP - Getty Images
An Iranian woman walks past a gas station in downtown Tehran on Wednesday. Iran's President Mahmoud Ahmadinejad said “The global oil price has not reached its real value yet. The products derived from crude oil are sold at prices dozens of times higher than those charged by oil-producing countries.”
updated 4/19/2006 1:50:44 PM ET 2006-04-19T17:50:44

President Mahmoud Ahmadinejad said Wednesday that the crude oil prices now at record levels still were below their “real value,” state-run Tehran radio reported.

In his first remarks on the current price of oil, the hard-line Iranian leader also said developed countries were benefiting most from the high prices.

“The global oil price has not reached its real value yet. The products derived from crude oil are sold at prices dozens of times higher than those charged by oil-producing countries,” the radio quoted Ahmadinejad as saying.

He did not say what oil prices should be.

Iran is embroiled in a dispute with the West over its nuclear program. Tehran insists its nuclear program is for peaceful purposes, but the United States and some of its allies suspect Iran is trying to develop weapons.

The U.N. Security Council has set an April 28 deadline for Tehran to stop uranium enrichment, which can make fuel for both nuclear energy and nuclear weapons. Earlier this week, President Bush said “all options are on the table” — including military action — to prevent Iran from developing atomic weapons.

Ahmadinejad stopped short of saying Iran would use oil as a weapon, a tactic much feared by his antagonists on the nuclear issue. Iran is the world’s fourth largest oil-producing country and the second in OPEC.

Meanwhile, the price of oil futures touched a new high of $72 on Wednesday.

George Orwel, an analyst at the New York-based Petroleum Intelligence Weekly, said he believed Ahmadinejad was not serious but was playing the oil card to resist pressure over his nuclear program.

“They are using the oil as a political football, every time there’s an issue with Iran, the oil market freaks out,” he said in a telephone interview.

Earlier this week, as oil prices pushed above a record $70 a barrel, ABN Amro broker Lee Fader said the trigger was “heightened fear about (U.S.) military action” against Iran over its defiance of the West on the nuclear issue.

If the United States were to attack Iran, Tehran might try to cripple the world economy by putting a stranglehold on the oil that moves through the Strait of Hormuz — a narrow, strategically important waterway running to Iran’s south.

While discounting Ahmadinejad’s seriousness in his Wednesday comments about the value of oil, Orwel conceded the oil industry could not do without the 2.5 million barrels that Iran exports daily.

“Ahmadinejad is trying to show his muscle so that the Bush administration can realize the consequences on the oil market of further confrontation with Iran,” Orwel said, adding that he fully expected Iran to threaten to cut off oil supplies if the confrontation with the West continued.

Ahmadinejad urged oil-producing countries, both inside and outside the Organization of Petroleum Exporting Countries, to establish a fund to help alleviate the pressure from high oil prices on the developing world.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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