(Adds State Department comment) WASHINGTON, March 23 (Reuters) - The United States backed Britain's demand for the immediate release of 15 British Royal Navy personnel seized by Iranian forces on Friday. Britain, Washington's chief ally in the Iraq war, said the incident took place in Iraqi waters, where its forces had searched a merchant ship as part of routine boardings carried out with U.N. permission. "We support the British demand for the safe return of their people and equipment," State Department spokesman Sean McCormack told reporters as a diplomatic crisis flared amid already heightened tensions over Iran's nuclear program. White House spokesman Tony Snow took a more cautious stance over the Iranian seizure, saying only that U.S. officials had been in touch with the British about it. "We are keeping watch on the situation," he told reporters in Washington. Britain's Foreign Office summoned Iran's ambassador and demanded the safe release of the 15. The incident took place a day after Iran launched a week of naval war games along its coast, including the narrow northern reaches of the Gulf which control access to the vast oil reserves of Iraq, Iran and Kuwait. Oil prices rose by about 1 percent to above $62 a barrel over concern that the incident could escalate and perhaps disrupt shipping from the Strait of Hormuz, the waterway for exports from Saudi Arabia. The United Nations Security Council is expected to vote on Saturday on a resolution to impose new sanctions against Iran over its refusal to halt uranium enrichment. Britain's Defense Ministry said the 15 had just finished inspecting a merchant ship when their two boats were surrounded by Iranian vessels and escorted into Iranian waters. Iranian officials could not immediately be reached for comment. (Additional reporting by Jeremy Pelofsky)
