A previous stand-off with Mexico was resolved, as the deal was announced just hours before Asia markets opened on Monday. The cuts will be gradually eased until April 2022.
OPEC, Russia and other oil-producing nations agreed to a record cut in oil output on Sunday. This cut of nearly 10 million barrels per day was made to stabilize oil prices amid the coronavirus epidemic and a price war.
The cut represents around 10% of global supply. By some accounts, the effective cuts could even amount to 20%.
Oil prices rallied on Monday due to the output cut deal. The international benchmark, brent crude, was up by 5%, at $33.08 (€30.27) a barrel.
The deal was agreed after four days of talks. The decision was taken just hours before the Asia markets were due to open on Monday.
Previous talks to cut oil production had stalled due to a stand-off with Mexico, but were resolved after other nations allowed Mexico to cut only 100,000 barrels a month. Mexican President Andres Manuel Lopez Obrador had said on Friday that US President Trump offered to make extra cuts on his behalf.
The group, known as OPEC+, will gradually keep decreasing curbs on production until April 2022. Sources said that Gulf members of the cartel would be making deeper cuts than previously expected.
US President Donald Trump hailed the deal, and congratulated Russian President Putin and Saudi Prince Salman on arriving at consensus.
Saudi energy minister Abdulaziz bin Salman stated that effective oil supply cuts from OPEC and its allies would amount to 12.5 million barrels per day, because of a higher output in April from Saudi Arabia, Kuwait and UAE. "I am honored to be a party of this historic moment and historic agreement," he said.
As more than 3 million people remain under lockdown due to the pandemic, global oil demand had fallen by nearly a third. Earlier talks to cut production had fallen apart due to a price war triggered between Russia and Saudi Arabia.