Opec and allies led by Russia pledged to cut 2.1 million barrels per day from the global oil markets from the beginning of next year, deepening their current restrictions as they look to rebalance the oil markets.
The Riyadh-Moscow led alliance will deepen existing cuts by an additional 500,000 bpd.
Saudi Arabia and other other producers would make "aditional voluntary adjustments" of around 400,000 bpd, raising the overall draw from the markets to 2.1 million bpd, Opec said in a statement on Friday.
Saudi Arabia, the world's largest oil exporter along with its Gulf allies including the UAE have been cutting above their required quotas as they look to counter high global inventories.
Riyadh, which priced state oil giant Saudi Aramco's shares at 32 Saudi riyals on Thursday is looking to raise $25.6 billion in what would be the world's biggest initial public offering. The kingdom needs oil prices higher ahead of the listing next week.
Brent surged 1.92 per cent and was trading at $64.61 per barrel at 7.17pm UAE time, while West Texas Intermediate was up 1.75 per cent, trading at $59.45 per barrel.
The latest production agreement will keep Saudi production at 9.744 million bpd from the beginning of next year. Russia, which has been reluctant to be on-board with extending cuts further than the first quarter of next year managed to exclude condensate volumes from its output quota. Condensate refers to a light oil associated with gas production. Moscow will keep cuts at 228,000 bpd from January.
The latest pledge by Opec+ has only "institutionalised" extra cuts already being undertaken by large exporters such as Saudi Arabia," said Giovanni Staunovo, commodity analyst at UBS.
"As Saudi Arabia was already producing well below its pledged quota ....no a new additional cut was suggested during the press conference," he said.
"The cuts remain dependent on pledged compliance improvement from countries which in the past were not compliant, so time will tell if the future is different," he added.
Meanwhile, a deepening of cuts by 500,000 bpd would be insufficient to restore market balance, JBC Energy said in a note on Friday.
"It is more of a compliance manoeuvre and an effort to distribute the Saudi over-compliance that has been in place since about April to other Opec+ members," the report said.
"The market has essentially “correctly” incorporated all this new information very carefully as it continues to trade in the $63-63.5 range it entered two days ago," it added.
Opec+ will convene for their summer gathering in the Austrian capital on 10 June.