In a bid to address the global glut of oil supply, members of OPEC reached a landmark agreement, at a meeting in Algiers, to cut their collective oil output sending oil prices soaring by 5%.
The member states of the oil cartel reached a consensus that output cuts are needed to help lift prices and rebalance the market.
OPEC oil production is expected to be reduced from 33.4 million barrels of oil per day to a range of 32.5 to 33 million barrels per day.
An OPEC source told several global media outlets that Saudi Arabia will reduce its oil production by 350,000 barrels a day. Three countries were exempted from output cuts: Iran, Nigeria and Libya.
Many observers see the deal as a sign of a new phase in Saudi-Iranian relations who have been antagonistic on oil policies and supporting opposite sides in civil wars in Syria and Yemen.
Oil Prices plummeted from as high as 100 dollars per barrel in 2014 to as low as 26 dollars per barrel last February. Currently, prices have recovered to hover around 47 dollars per barrel.
