Saudi Crown Prince Mohammed bin Salman has warned that oil prices may soar if the world does not act to deter Iran.
He said failure to act could embolden Iran and lead to war, which he said would ruin the global economy.
The prince was speaking after an attack on oil facilities which he blames on Tehran. Iran said the remarks would "bring [the Saudis] nothing but shame".
Mohammed bin Salman also said he accepted some responsibility for journalist Jamal Khashoggi's killing.
But, speaking to CBS News, he denied personally ordering it.
The prince, who is considered the de facto ruler of Saudi Arabia, is suspected of personally targeting Mr Khashoggi, a Saudi journalist critical of the government in Riyadh.
Mr Khashoggi was killed in Saudi Arabia's consulate in Turkey on 2 October 2018.
In an interview with CBS' 60 Minutes news programme on Sunday, he said: "I take full responsibility as a leader in Saudi Arabia, especially since it [the killing] was committed by individuals working for the Saudi government."
However, he denied ordering the killing of Mr Khashoggi directly, or having knowledge of it at the time.
Saudi authorities have since blamed a "rogue" operation for his murder and put 11 men on trial.
The prince also appeared to offer talks for a political solution to the civil war in Yemen, where government forces backed by a Saudi-led coalition are fighting Houthi rebels supported by Iran.
Iran is Saudi Arabia's regional rival and an opponent of the US, which pulled out of a treaty aimed at limiting Tehran's nuclear programme after Mr Trump took power.
US-Iran tensions have risen markedly this year, with the US blaming Iran on attacks on six oil tankers in the Gulf between May and July. Tehran rejects the accusations.
What about the crown prince's oil warning?
Iran has denied any involvement in the attacks on Saudi Arabia's oil facilities earlier in September, which knocked out about 5 percent of global oil supply and sent oil prices soaring.
But Mohammed bin Salman, the heir to the Saudi throne, said: "If the world does not take a strong and firm action to deter Iran, we will see further escalations that will threaten world interests.
"Oil supplies will be disrupted and oil prices will jump to unimaginably high numbers that we haven't seen in our lifetimes."
He said the Middle East region "represents about 30 percent of the world's energy supplies, about 20 percent of global trade passages, about 4 percent of the world GDP".
"Imagine all of these three things stop. This means a total collapse of the global economy, and not just Saudi Arabia or the Middle East countries," the prince said.
He blamed Iranian "stupidity" for the attacks, saying there was no strategic goal.
Saudi Arabia says 18 drones and seven cruise missiles were fired on the country's two oil facilities in Abqaiq and Khurais on 14 September. Yemen's Iran-aligned Houthi rebels have said they were behind the attacks.
A week after the facilities were hit, the US pledged to send troops to Saudi Arabia to help defend against further attacks.
What did he say about Yemen?
The prince urged Iran to cease its support for Houthi rebels, saying it would be "much easier" to bring the war to an end.
"Today we open all initiatives for a political solution in Yemen," he said. "We hope this happens today rather than tomorrow."
He welcomed a Houthi ceasefire, announced several days ago, as a "positive step" towards political dialogue.
The civil war has triggered the world's worst humanitarian disaster, with 80 percent of the population requiring humanitarian assistance or protection.
More than 70,000 people are believed to have died since 2016 as a result of the conflict, according to UN estimates.
What about jailed women's rights activists?
The crown prince said he would "personally follow up" on allegations that women's rights activist Loujain al-Hathloul was tortured in jail.
Ms Hathloul and other activists have been in custody for more than a year, despite organising a successful campaign for rights such as that of a woman to drive and travel without a man's permission.
But the prince said the decision whether or not to release the activists lay not with him, but with the public prosecutor.
Asked why they had been jailed, he said laws had to be respected, even though there were some he disagreed with.