Updated 01:42 AM PHT Thu, December 1, 2016
Vienna (CNN Money) — OPEC finally has a deal!
The oil cartel finalized an agreement on Wednesday to cut its overall production by 1.2 million barrels a day.
Crude prices boomed by almost 9% to $49.20 per barrel as investors cheered the long-awaited deal.
The agreement will set OPEC's new production ceiling at 32.5 million barrels a day starting in January. That's down from the 33.6 million barrels a day the group pumped in October.
"We had made great success today," said Mohammed bin Saleh al-Sada, the president of OPEC. "It will definitely help to re-balance the market and reduce overhang."
Indonesia had decided to suspend its membership of OPEC because it could not agree to the production cut, he added.
The agreement hinges on the cooperation of major non-OPEC producers, who must also cut their production by 600,000 barrels a day. Al-Sada said that OPEC had already received a commitment from Russia to slash its production by 300,000 barrels a day.
The idea is that a production cut will help boost crude prices, which have already risen from $26 per barrel in February.
The meeting, which was held in Vienna, caps months of fraught negotiations that pitted the cartel's de-facto leader Saudi Arabia against its regional rival Iran.
Iran's production level was a key sticking point in negotiations. Tehran had insisted on keeping its production near 4 million barrels a day, which is the amount it was pumping before sanctions were imposed.
A compromise appeared to be in the works earlier Wednesday, when Saudi Arabia hinted that it would allow Iran to be exempt from the cut.
In September, producers achieved a breakthrough and preliminarily agreed to trim output for the first time since 2008.
The tentative agreement sent crude soaring above $50 a barrel -- but the lack of agreement on final details caused investors to worry that the deal may fall through.
Al-Sada as asked during a press conference to address whether OPEC was still a vital organization.
"OPEC is still OPEC," he said. "Today's unity is a very explicit sign about the position of OPEC."
In addition to Iran, Nigeria and Libya were also hoping to secure an exception from the production cuts. Both countries had seen their production drop because of of armed conflict.
Matt Egan and Ivana Kottasova contributed reporting.
This story was first published on CNN.com, "Oil prices skyrocket as OPEC confirms deal to cut production"