"The impact a conflict would have, I repeat, on the oil prices. It just ... would be a disaster for the whole area," Pakistan Prime Minister Imran Khan told CNBC's Hadley Gamble at the World Economic Forum in Davos, Switzerland.
When asked if he thinks U.S. President Donald Trump wants dialogue with Tehran, Khan said that would be "sensible."
"Just look at Afghanistan, it's almost now 19 years," he said. "We're still finding a solution, still trying to get peace talks going."
"Does the U.S. want another conflict?" he asked. "Trust me, Iran will be (a) much, much more difficult conflict than even Afghanistan."
Tensions in the region escalated in early January after Iran's top military general Qasem Soleimani was killed in Baghdad by an American airstrike. Tehran retaliated by firing ballistic missiles at U.S. targets in Iraq, but both parties appear to have stepped back from further military actions.
"A conflict right now with Iran would be a disaster for developing countries," said Khan. "Oil prices will shoot up. Countries like us who are just about balancing our budgets, everything will go up and it'll just cause poverty."
"I did say to President Trump ... war is not the solution."
Khan, who visited Iran last October in a bid to mediate between Washington and Tehran, said Iran's leaders seemed open to holding discussions with the U.S.
"I thought they were receptive. I thought they ... were willing to talk," he said.
He also said war is "never a solution."
"You use (the) military to solve one problem, five other problems come up — unintended consequences," he said. "People who try and solve issues through bloodshed and war, they always cause mayhem in this world."