OPEC clinched a deal to curtail oil supply, confounding skepticsas the need to clear a record global crude glut — and provethe group's credibility — brought its first cuts in eight years.Crude rose as much as 8.8% in London.

OPEC will reduce output to 32.5 million barrels a day, IranianOil Minister Bijan Namdar Zanganeh told reporters in ViennaWednesday. The breakthrough deal showed an apparent acceptance bySaudi Arabia that Iran, as a special case, can still raiseproduction.

The Organization of Petroleum Exporting Countries is ditching apump-at-will policy introduced in 2014 to resume its traditionalrole as price fixer. The shift — aimed at draining a crude glutthat's pushed down prices for two years — will help revive thetattered finances of oil-producing countries and reverberate inmarkets around the world, from the Canadian dollar to Nigerianbonds to U.S. shale equities.

“This should be a wake-up call for skeptics who have argued thedeath of OPEC,” said Amrita Sen, chief oil analyst at EnergyAspects Ltd. “The group wants to push inventories down.”

After weeks of often tense negotiations, the eventual alignmentof OPEC's biggest producers points to the increasing dominance ofIran among the group's top ranks. The Saudis accepted thatIran can raise output to about 3.8 million barrels a day, accordingto one delegate, marking a victory for the Persian Gulf countrythat has long sought special treatment from OPEC as it recoversfrom sanctions. Saudi Arabia previously proposed that its regionalrival limit output to 3.707 million barrels a day, delegatessaid.

The agreement, which also calls for a reduction of about 600,000barrels a day by non-OPEC countries, pushed up Brent crude by asmuch as $4.08 to $50.46 a barrel. Prices remain at half their levelof mid-2014.

“Prices reacted positively, but the devil is in thedetail,” said Carsten Fritsch, an analyst at Commerzbank AG.“We have to wait for a country breakdown and whether it's reliableor not.”

Saudi Arabia will limit output to 10.058 million barrels a day,Oil Minister Khalid al-Falih said in Vienna. Iraq, OPEC'ssecond-largest producer, agreed to cut production by 209,000barrels a day, according to one delegate. The country previouslypushed for special consideration, citing the urgency of itsoffensive against Islamic State.

Morgan Stanley said Monday that an OPEC agreement could boostcrude prices by $5 or more. While the deal is unlikely to be enoughto wipe out the crude glut entirely — OPEC's own estimates show itneeds to pump just 31.9 million barrels a day from January to Juneto balance supply and demand — it clears the way for participationby non-OPEC suppliers.

Russia, the biggest producer outside the bloc, has said if OPECagrees on individual country quotas it's ready to participate,including possibly reducing its output, a person familiar withRussian thinking said earlier. That would mark a reversal of itsprevious position.

OPEC plans to hold talks with non-0PEC producers next week inDoha, a delegate said.

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