"Oil is significantly overpriced," Finance Minister Alexei Kudrin said in Russian at a press briefing Saturday in Washington. His comments were embargoed until 8 a.m. Moscow time on Oct. 21. "The price is at a speculative level and has heated up because of conflicts in oil-producing regions. The jump in price is temporary."

Crude oil breached US$90 a barrel in New York for the first time on Oct. 19 and last traded at US$88.60. Oil rose 5.9 percent this past week because of the dollar's depreciation and concern Turkey may attack Kurdish rebels in Iraq, owner of the world's third-largest oil reserves.

"Based on our studies, a realistic price is closer to US$50 a barrel," Kudrin said. "Taking into account inflation, oil will increase a little bit and will be at about US$60 a barrel in 10 years."

Crude oil prices have "overshot their fundamentals and are likely to come down sharply," Eric Chaney and Richard Berner, analysts at Morgan Stanley, wrote in an Oct. 19 report. Even so, "further increases toward US$100 are still possible, as the combination of lower-than-expected inventories, OPEC discipline, and renewed geopolitical tensions, robust Asian demand and a weak U.S. dollar have worked nicely for oil bulls."

Russia has 79.5 billion barrels of untapped oil, the sixth-largest reserves in the world, behind Saudi Arabia, Iran, Iraq, Kuwait and Venezuela, according to 2006 figures published by London-based BP Plc. The country pumped 9.77 million barrels of oil a day last year, enough to supply 64 percent of U.S. demand.

Only Saudi Arabia had higher output with 10.9 million barrels a day, according to BP.

The price of Urals, Russia's major export blend of oil, has surged almost eight-fold since 1998. That increase has helped boost the nation's oil fund, which accumulates some of the revenue from crude oil sales, to about US$141 billion. Russia's foreign currency and gold reserves, the world's third largest, were at US$425 billion as of the end of September, up from US$12 billion in 1998.

"Such a jump in oil prices gives Russia more foreign currency, but it's unsustainable," Kudrin said.