Oil Prices Jump as OPEC Agrees to Curb Production

The price of crude oil rose 10% on Wednesday after the Organization of the Petroleum Exporting Countries finally agreed to trim output, but only if other producers do so too.

The cartel says it is prepared to reduce production by 1.2 million barrels per day—less than 4% of its normal output—beginning in January. OPEC accounts for roughly 40% of the world’s oil production.

But the pledge is contingent upon non-OPEC countries agreeing to lower their daily production by a combined 600,000 barrels. The cartel says Russia, for example, is prepared to cut its petroleum output by 300,000 bpd, or about 3%.

OPEC did not specify which other countries must participate. The group plans to hold talks with other producers on Saturday. The 14-nation cartel also suspended one of its members, Indonesia, because the country already imports more oil than it exports.

The announcement of an agreement caused the price of Brent crude, the international standard, to rise by $4.18 to $51.50 per barrel on Wednesday. The U.S. standard, West Texas Intermediate, gained $3.82 to $49.05 per barrel. Oil prices, which reached $115 in mid-2014, have languished around $45 for much of 2016.

OPEC agreed in principle two months ago to cut daily prodution by 700,000 barrels as a way to bolster oil prices. But the group was unable until now to agree on details. Even so, analysts consider Wednesday’s agreement fragile at best. They note that cartel members have routinely ignored their own self-imposed quotas for years. The member also continue to disagree about how to measure production, making it difficult to monitor output.