Brent crude oil rose almost 6% to nearly $49 a barrel after Opec has agreed a preliminary deal to cut production for the first time in eight years.
The major oil exporting nations struck the deal at talks in Algeria on September 28 to ease fears of oversupply.
“Opec made an exceptional decision today,” Iran’s Oil Minister Bijan Zanganeh said.
Oil ministers said full details of the agreement would be finalized at a formal Opec meeting in November.
Output will fall by about 700,000 barrels a day, although the cuts will not be distributed evenly across the cartel, with Iran being allowed to increase production.
Disagreements between Iran and its regional rival Saudi Arabia had thwarted earlier attempts to reach a deal.
Many of Opec’s smaller members pushed for the cut after seeing oil prices plunge from $110 a barrel over the past two years due to oversupply and slowing demand.
Nigerian Oil Minister Emmanuel Ibe Kachikwu said it was a “very positive deal”, while Algerian Energy Minister Noureddine Bouarfaa said: “The decision was unanimous, and without reservations.”
The outline deal will limit output from Opec countries to between 32.5 million and 33 million barrels a day, said Mohammed Bin Saleh Al-Sada, Qatar’s energy minister and current president of Opec.
Current output is estimated at 33.2 million barrels per day, although Iraq questioned on Wednesday how Opec measures the oil production of its members.
Some oil traders remain skeptical about the deal, saying they want to see the full terms, including the cuts agreed by individual member states, before passing judgement.