ALGIERS: The Organisa­tion of Petroleum Exporting Countries agreed on Wednes­day to cut its oil output for the first time since 2008, with the group’s leader Saudi Arabia softening its stance on Iran amid mounting pressure from low oil prices.

Two sources said the group would reduce output to 32.5 million barrels per day from current production of 33.24 million bpd.

How much each country will produce is to be decided at the cartel’s next formal meeting in November, when an invitation to join cuts could also be extended to non-Opec countries such as Russia, the sources said.

Oil prices jumped more than five percent to trade above $48 per barrel after the outcome of Opec’s informal meeting in Algeria took traders by surprise. Still, many said they wanted to see the details of the deal.

“We don’t know yet who’s going to produce what. I want to hear from the mouth of the Iranian oil minister that he’s not going to go back to pre-sanction levels. For the Saudis, it just goes against the conventional wisdom of what they’ve been saying,” said Jeff Quigley, director of energy markets at Stratas Advisors.

Published in Dawn September 29th, 2016