US President Donald Trump’s call to reduce prices fell on deaf ears as the Organisation of the Petroleum Exporting Countries (OPEC) and Russia agreed on December 7 to slash oil production by more than market expectations.

As a result, oil prices jumped about 5 per cent to more than $63 a barrel as the combined cut of 1.2 million barrels per day was larger than the 1 million figure the market had expected. The cartel agreed to curb output from January by 800,000 barrels per day, while allies will contribute a reduction of 400,000 barrels.

Earlier, Trump had pressed OPEC’s de facto leader Saudi Arabia to help the global economy by refraining from paring supplies. Increasing prices is good news for Iran amid attempts by Washington to squeeze the economy of OPEC’s third-largest producer.

Further complicating Riyadh’s decisions was the crisis related to the killing of Washington Post journalist Jamal Khashoggi at the Saudi consulate in Istanbul in October. Trump has backed Saudi Crown Prince Mohammed bin Salman despite calls from many US politicians to impose stiff sanctions on the kingdom.

The deal had hung in the balance during the two-day OPEC meeting in Vienna - first on fears that Russia would cut too little, and later on concerns that Iran, whose crude exports have been depleted by US sanctions, would receive no exemption and block the deal. But after hours of talks, Iran gave OPEC the green light and Russia said it was ready to cut more.

Russia agreed to reduce output by 228,000 barrels per day from October levels of 11.4 million barrels per day - but the cuts would be gradual and take place over several months.

OPEC’s second-largest producer Iraq pledged to cut 140,000 barrels per day. Saudi Arabia said its output was set to decline to 10.2 million barrels per day in January from 10.7 million barrels per day in December. Iran, Libya and Venezuela were given exemptions.

Oil prices have fallen almost a third since October as Saudi Arabia, Russia and the UAE raised output to offset lower exports from Iran.

Russia, Saudi Arabia and the US have been vying for the position of top crude producer in recent years. The US is not part of any output-limiting initiative due to its anti-trust legislation and fragmented oil industry. Official data released on December 6 showed the US had become a net exporter of crude and refined products for the first time on record.