(CNN) - OPEC announced on Monday it will restrict the supply of oil for another nine months in a bid to support prices pressured by weakening economic growth and skyrocketing American production.
After five hours of wrangling in Vienna, the group unveiled an agreement to extend until the end of March 2020 the production cuts that were first implemented in 2017. Those cuts were due to expire.
OPEC said its decision was based in part on the fact that "economic bearishness is now increasingly prevalent" because of trade tensions, central bank policies and "geopolitical issues."
Additionally, OPEC agreed in principle to formalize a charter for cooperation with non-member producers such as Russia despite objections from Iran, which insisted the agreement must be ratified by national governments.
Saudi Arabia, the biggest producer within OPEC, and Russia, its most important outside ally on oil policy, met over the weekend to discuss extending the supply curbs that were first introduced after global oil prices crashed.
Saudi oil minister Khalid Al-Falih met with his Russian counterpart Alexander Novak on the sidelines of a summit of G20 leaders in Osaka, Japan.
"During the meeting, they discussed the options for extending the OPEC + deal, as well as the cooperation in the oil and gas sector between the Kingdom of Saudi Arabia and Russia," the Saudi Press Agency reported.
Oil prices rallied on Monday in anticipation of the OPEC news and in response to the truce in the trade war between the United States and China. US oil prices finished the day 1.1% higher, giving back some earlier gains.
The production cuts won the support of Iran, Saudi Arabia's regional rival, despite rising tensions between the two countries over the war in Yemen and attacks on oil tankers in the Strait of Hormuz.
It won't please President Donald Trump, however, who has repeatedly called for OPEC to pump more oil to keep US gas prices in check.
US sanctions on Iran helped drive prices sharply higher in the first four months of this year. Iran's oil exports have slumped since the expiry in May of waivers allowing some of its biggest customers, such as India, to continue buying without fear of US legal action.
The United States has overtaken Saudi Arabia and Russia to become the world's biggest oil producer, thanks in large part to a boom in the Permian Basin in West Texas. Its imports from OPEC plunged to their lowest level in three decades earlier this year.
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