Heather Langan / Bloomberg | July 4, 2008

Iran will view an attack on its nuclear facilities as an act of war and will respond, the head of the country’s Revolutionary Guard Corps said.

“Any act on Iran will be considered the start of war,” General Mohammad Ali Jaafari told reporters yesterday in response to questions about the threat of an Israeli strike on Iranian atomic sites, according to remarks carried today on the state-run Islamic Republic News Agency. Jaafari also said he thought it is unlikely such an attack would be carried out.

The U.S. and many of its allies accuse Iran of trying to develop nuclear weapons. Iran insists the program is aimed at producing electricity. Iran today will present its response to incentives from world powers intended to persuade the country to suspend work to enrich uranium, Agence France-Presse reported. The material can fuel a power station or arm a nuclear weapon.

Reports that Israel may attack Iran have boosted oil prices. If attacked, Iran will “impose control” on the Strait of Hormuz, Jaafari said on June 28. About 20 percent of the world’s daily supply of oil passes through the strait. Crude for August delivery rose $5.08, or 3.6 percent, to $145.29 a barrel this week on the New York Mercantile Exchange. Futures reached $145.85 a barrel yesterday, the highest since trading began in 1983.

Iranian Oil Minister Gholamhossein Nozari, who was in Madrid for the World Petroleum Congress, yesterday reiterated his nation’s pledge to respond to any strike.

Impact on Markets

“Iran’s stance in this connection against enemies is clear, vivid and strong,” Nozari told the Iranian news agency before leaving Madrid. “Oil is an energy and industry for peace and its durability depends on peace and security. So, any tension in any region, especially in the Persian Gulf, which is the major supplier of the main part of the world’s energy, will have an impact on the energy market which is principally unpredictable.”

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