Oil prices surged following the news. As of 9am (EST), Brent crude showed an 8% hike and was trading over $50.
It was later reported that Saudi Arabia is going to cut its oil production to 10.06 million barrels a day and Iran will limit its output to 3.79 million barrels per day under the new OPEC production-limiting deal.
Iraq has agreed to cut its oil production by 209,000 barrels per day.
"This should be a wake-up call for skeptics who have argued the death of OPEC. The group wants to push inventories down," Bloomberg reported Amrita Sen, chief oil analyst at Energy Aspects Ltd, saying.
This is the first time that the organization has agreed to cut oil output since 2008.
According to further reports from Bloomberg, OPEC is planning to hold a meeting with non-members on December 9.
In September, OPEC members reached a preliminary deal in Algeria to cap oil production at 32.5-33 million barrels per day.
Oil market turbulence caused oil prices to plunge from $115 per barrel in June 2014 to less than $30 per barrel in January 2016, causing hardship for oil exporters and placing a number of global oil producers at risk of bankruptcy. Since then, prices have slightly increased and are currently at $45-50 per barrel.
The previous oil producers' talks to freeze output failed in April after Iran refused to limit its output, prompting Saudi Arabia to pull out as well. Under the new deal, Iran has been granted exemptions from production cuts alongside Libya and Nigeria.