Members of Opec have reached a preliminary agreement to curb oil production for the first time since the global financial crisis eight years ago, immediately pushing up prices.
Mohammed Bin Saleh Al-Sada, Qatar’s energy minister and current Opec president, announced the deal after several hours of talks on Wednesday in the Algerian capital Algiers.
The preliminary deal will limit output from the Organisation of the Petroleum Exporting Countries to 32.5 million barrels per day, he said. Current output is estimated at 33.2 million barrels per day.
Disagreements between regional rivals Saudi Arabia and Iran had dimmed hopes for a deal.
Algerian officials had said participants reached a “pre-accord” on production curbs to be finalised at an Opec meeting in Vienna in November.
As news of the impending deal circulated earlier on Wednesday, benchmark US crude jumped $2.38, or 5.3%, to $47.05 a barrel in New York.
Brent crude, the international standard, was up $2.72, or 5.9%, to $48.69 a barrel in London.
Iran would not have the same proportional reductions as other countries under the pre-accord but would limit production to 3.7 million barrels a day, according to an adviser to Algeria’s energy minister. It is currently estimated to be pumping around 3.6 million.