OPEC has agreed to cut its oil production for the first time in eight years in an effort to boost crude prices.
The cartel will cut 1.2 million barrels a day from its present output after its 14 members put aside differences at a meeting Wednesday to agree on individual production levels.
The move, which will leave OPEC output at 32. 5 million barrels a day, is to take effect in January, said OPEC President Mohammed Bin Saleh Al-Sada.
Al-Sada said major non-OPEC producers were ready to act in concert with OPEC and tentatively planning to reduce their output. He did not list the countries involved beyond saying Russia was prepared to cut 300,000 barrels from its output of more than 10 million barrels a day.
Al-Sada also announced that Indonesia had suspended its membership rather than agree to its share of cuts.
The price of crude, which had soared earlier in the day amid anticipation of a deal, rose further. The international benchmark was up $3.48, or 7.4 percent, at $49.86 a barrel.
A production cut could have a lasting impact on consumers as oil price increases feed into the cost of car fuel, heating and electricity. It could also restore some authority to OPEC as an arbiter of prices and supplies after years of inconclusive meetings undermined by infighting.
One of the biggest hurdles had been a rivalry between Saudi Arabia and Iran, whose struggle for dominance in the Mideast is also playing out in the Organization of the Petroleum Exporting Countries.
The Saudis have long been hesitant to shoulder the lion’s share of a cut, while Iran has resisted reducing its own production. It argues it has yet to recover its output levels hit by years of sanctions.
Al-Sada said that Saudia Arabia, the biggest OPEC producer, will cut 486,000 barrels from its production of more than 10 million barrels a day.