DAYTON, Ohio, March 27 (UPI) -- President Bush said Iraq's nationalized oil sector is a Saddam Hussein "legacy" that is harming Iraq's economy, and losing the war would "endanger" Iraq's oil.

"Iraq has great economic potential -- they've got a young, energetic population, it's got a lot of natural resources," Bush said Thursday in a war on terrorism speech in Dayton, Ohio.

"The reality is that retreating from Iraq would carry enormous strategic costs for the United States. It would incite chaos and killing, destroy the political gains the Iraqis have made, and abandon our friends to terrorists and death squads," he said. "It would endanger Iraq's oil resources and could serve as a severe disruption to the world's economy."

The price of oil increased to $105 per barrel Thursday as a strategic pipeline was bombed during the Iraqi military campaign in the oil hub of Basra that started Tuesday.

Bush said the insurgents weren't the only threat to Iraq's oil. "In many ways, the legacy of the tyrant continues to haunt the Iraqi economy. The government is forced to rely on the centralized food and fuel rationing system that Saddam used to control his population and to punish his enemies.