The Organisation of the Petroleum Exporting Countries on Wednesday agreed to its first cut in production output since 2008, Reuters reported. Russia also agreed to join the pact, which is being seen as a move to push up oil prices. While Saudi Arabia will cut its output by .5 million barrels per day to 10.06 million barrels per day, Kuwait, Qatar and the United Arab Emirates will reduce their production by 0.3 million barrels per day.

Iraq also agreed to cut its production by 0.2 million barrels per day, an unexpected move as the country had been calling for higher quotas to fund its fight against the Islamic State. However, Indonesia refused to comply with the proposed reduction in production and said it would suspend its membership with the body. Jakarta is the only East Asian member of Opec.

Opec president Mohammed Bin Saleh Al-Sada said non-member countries were also expected to reduce their production by 600,000 barrels per day, AP reported. Al-Sada called the move a “historic moment” and said it will “definitely balance the market”. The agreement will take effect on January 1, 2017, and Opec will consult non-members to decide when they will begin reducing their production, Al-Sada added.

Following the announcement of the pact, the price of crude oil jumped by 8.3% to $50.24 (approximately Rs 3,438.17). The move is expected to provide relief to oil producing nations, which have been seeing stiff competition from the United States. An earlier effort to compete with the US, by drastically increasing supply, saw oil prices dropping to record lows. The move had affected the economies of Opec members.