Oil ministry representatives from Saudi Arabia, Iran, Venezuela, and Mexico agreed Friday to cut production by more than 2 million barrels a day in an attempt to bolster oil prices.
In early trading on the New York Mercantile Exchange after the news, crude for April delivery broke back through the $15-a-barrel mark, gaining 74 cents. In London, the announcement pushed North Sea Brent Blend crude oil up 78 cents to $12.96 per barrel in midday trading at the International Petroleum Exchange.
The agreement is effective April 1, Saudi Oil Minister Ali Naimi said. The pact was reached after two days of meetings ahead of a March 23 meeting of OPEC oil ministers in Vienna, Austria.
After hovering near 12-year lows this winter, oil prices have rebounded in recent days as traders grew optimistic that some production cutbacks would be announced before the OPEC meeting.
Further details of the cuts were expected to be released later in the day.
The issue of Iran's production had been one of the major obstacles to a new agreement on further output cuts by both the Organization of the Petroleum Exporting Countries and non-OPEC countries.
Iran has insisted that any cuts be made from a base production level of 3.925 million barrels a day, while other oil producers claim that figure should actually be 3.623 million barrels a day.
In the past week, consultations between Saudi Arabia and Iran and also between Gulf Cooperation Council members appear to have broken the stalemate.