Putin Highlights Price Difference with Saudis and OPEC+ with Key Production Decision Looming

Saudi Arabia and Russia may not see eye-to-eye on the targeted price of crude oil, which could complicate the two sides’ efforts to reach a joint decision on supply, according to multiple reports.

Russian President Vladimir Putin said on Thursday that Russia had differences with OPEC over what constituted an acceptable price for oil, but that Moscow would take a joint decision on output with OPEC colleagues at a policy meeting in the coming weeks, Reuters reports.

“We have certain differences in opinion regarding the fair price,” Putin told reporters on Thursday. “$60-65 a barrel suits us just fine” because Russia’s budget is based on $40 crude, he said, according to Bloomberg.

While Saudi Arabia as the de-facto leader of OPEC would likely prefer production cuts to be extended beyond their agreed upon expiration date, Russia may be reluctant to agree. As Bloomberg notes, both diverging interests and surging market volatility are making their decisions more difficult.

The next OPEC meeting is scheduled for June 25th in Vienna.

U.S. oil prices fell back into a bear market on Wednesday and reached the lowest price since January this week as fears of a global trade war overrode any concerns about supply disruption.

OPEC and its partners will take the current “economic bearishness” into account when they meet in coming weeks, and are committed to keeping oil markets balanced this year and beyond, OPEC Secretary-General Mohammad Barkindo said in remarks delivered via video link at a conference hosted by RBC Capital Markets in New York.