An "element of fear" is playing into the price of oil despite higher supply and decreasing demand, Saudi Prince Alwaleed bin Talal al Saud told CNBC Monday.
Bin Talal, the billionaire member of the Saudi Arabian royal family who runs the Kingdom Holding Co., said the fear comes from "what may happen with Iran and the possibility of closing the Hormuz Strait."
But Saudi Arabia has already said it will not let theprice of oil, which closed Monday around $97 a barrel, go above $100, bin Talal said.
"We can use our leverage, our excess capacity to be sure to pump more [oil] if needed so it will not impact the consumer countries while they’re getting out of their recessions slowly but surely," the prince said.
As for Iran, he said it is important for the U.S. and other nations to put sanctions on the "renegade country" to force its government to negotiate. Issuing an ultimatum of war would push Iran to the "desperate move" of blocking the vital oil shipment waterway.
"I believe a solution is not impossible with them," bin Talal said of Iran. "A dialog is the best way to do it."
Although he still sings his usual anti-Israel tune:
But if the strait is blocked he believes the U.S. can reopen the strait "very quickly." He added he wants a "nuclear-free" region, which means Israelshould give up its nuclear arsenal, too.I find it quite interesting that when the Chief of Dubai spelled out the biggest threats to the Gulf Region, he failed to mention Israel as a threat.