After over two years of low oil prices OPEC members agreed on Wednesday to trim output by less than 1 million barrels per day.
OPEC members met on the sidelines of the International Energy Forum in Algeria on Wednesday and agreed to reduce output by about 700,000 barrels per day.
According to Reuters, OPEC members have agreed to cut the group’s output range to between 32.5 million to 33 million bpd.
The group’s current output is estimated at 33.24 million bpd.
Saudi Energy Minister Khalid al-Falih told Retuers that the deal will allow Iran, Libya and Nigeria to produce “at maximum levels that make sense.”
Iran’s desire to grow production now that Western sanctions have been lifted scuttled two two previous attempts at reaching a production deal.
Iran is currently producing about 3.63 million bpd but is targeting a production level of just over 4 million bpd.
The agreement marks the first OPEC production deal since 2008, Reuters said.
While Saudi Arabia is expected to bear the brunt of the cuts OPEC members will not finalize a plan until the group’s next official meeting in November.
According to Reuters, OPEC may also ask other non-OPEC producers such as Russia to sign onto the production agreement.
Saudi Arabia has consistently pumped over 10 million bpd since prices began falling in late 2014 in a bid to retain market share.
Saudi Arabia, OPEC’s largest producer, saw it’s output drop by 40,000 bpd in August after hitting a record high of 10.67 million bpd in July, according to Bloomberg.
The production agreement came just one day after Saudi Arabia announced that it would cut pay for some public sector employees and freeze pay for lower ranking employees, the BBC said.
The cuts are designed to help the kingdom cope with a mounting budget deficit that hit about $98 billion in 2015 as low oil prices squeezed revenues.
OPEC will host its next official meeting on October 4 in Vienna.