OPEC and its allies reached a deal to slash oil production on Friday despite pressure from President Donald Trump to keep pumping.
The cuts will remove 1.2 million barrels a day from world markets, UAE energy minister and OPEC president Suhail Al Mazrouei told reporters. US crude prices spiked nearly 5% to $54 a barrel on the news.
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Members of OPEC pledged to reduce their production by 800,000 barrels per day for six months beginning in January. Russia, and other producers outside the cartel, promised to slash an additional 400,000 barrels per day.
OPEC members Iran, Venezuela and Libya have been granted exemptions from the cuts.
The deal, which should help eliminate excess supply, caps a turbulent week for OPEC that started with a decision by Qatar to leave the cartel.
On Thursday, OPEC members emerged from a first day of negotiations in Vienna without a consensus on production cuts. A press conference was canceled and crude prices dropped.
Oil prices have crashed since October
Discussions on Friday included Russia, the world's second biggest oil producer and a key partner since 2016 in OPEC efforts to balance oil supply and demand.
Both sessions were overshadowed by Trump's repeated calls to keep output steady.
But OPEC is trying to stabilize oil markets after US crude prices plunged 22% in November, marking the the worst month since the global financial crisis in 2008. World oil prices are down by about 31% since early October.
The Vienna meetings focused on how much production OPEC and Russia would cut, and how the reductions would be shared among the wider group.
Saudi Arabia's energy minister Khalid Al-Falih said that the group's decision to slash production was made out of economic necessity and was "not driven by any political agenda."
"When you consider the complexity and the number of variables at play, I am quite pleased that we were able to finish on Friday and go home for the weekend," he told reporters.
Relief for US oil companies
Asked about pressure from Trump, Al-Falih said that oil companies in the United States would appreciate the group's efforts.
"I know for a fact that oil and gas producers in the United States are probably breathing a sigh of relief that we are providing some certainty and visibility for 2019," he said.
Global markets are awash with oil. The United States is pumping at record levels and recently surpassed Russia and Saudi Arabia for the first time since 1973 as the world's largest producer.
Meanwhile, Iran is still selling crude despite sanctions. The United States surprised OPEC and other producers by granting waivers to eight countries to continue buying Iranian oil after it reimposed sanctions in November.
Saudi Arabia and others had agreed back in June to pump more oil, partly to make up for lost Iranian supplies and prevent prices spiking to $100 a barrel.
"The last six months we have demonstrated that we are not just in the business of cutting, we are also in the business of releasing supplies when needed," said Al-Falih.
"I think many people underestimate the impact we've had on the global economy," he added.