The Organization of the Petroleum Exporting Countries (OPEC) reached a new deal to curb global crude output. Oil prices surged over 4 percent following the news.
OPEC members and major oil producing countries led by Russia have agreed to cut crude output by 1.2 million barrels per day (bpd), a spokesman said as quoted by Bloomberg.
The long-anticipated deal was reached as OPEC and major global producers met in Vienna. The key purpose of the meeting was to negotiate production cuts in order to boost global crude prices that have seen a dramatic drop of nearly 30 percent over recent months.
Major crude benchmarks saw a 4 percent jump in prices after the deal was reached. Brent crude jumped to $63.04 per barrel at 14:08 GMT on Friday, while US crude benchmark West Texas Intermediate (WTI) surged to $53.85 a barrel.
Earlier, Reuters reports emerged stating Russia was planning to agree to cut 200,000 bpd (barrels per day), if the 15-member organization offers the curbs of more than one billion bpd.
There were also earlier reports that the OPEC negotiations had stalled due to some members refusing to cut production.
Iran reportedly demanded exemption from the cuts amid Saudi-backed US sanctions, but Saudi Arabia was refusing to agree to the exemption. Iran, OPEC’s third-largest producer, has considerably reduced its oil exports so far.
The agreement on production cap was reportedly reached by the cartel and its partners at the beginning of December. However, discussion of individual quotas has reportedly stalled.