“We expect that the price of oil will reach US$250 per barrel very soon,” the chief executive, Alexei Miller, told journalists on the sidelines of a visit to energy-rich Azerbaijan by President Dmitry Medvedev.

Russia’s is the world’s second-biggest producer and exporter of oil after Saudi Arabia. Gazprom is a state-controlled gas monopoly that also owns Russian oil major Gazprom Neft and has plans to expand its oil business.

Miller warned that gas prices for Europe will rise to US$500 per 1,000 cubic meters by the end of 2008 from their current level of under US$400. If the price of oil rises to US$250 per barrel, then gas export prices will rise further to US$1,000 per 1,000 cubic meters, he said.

The European Union relies on Russia for about a quarter of its gas and oil supplies.

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