The countries of the Organization of Petroleum Exporting Countries (OPEC) and their allies have agreed on a larger-than-expected reduction in oil production. The countries will shrink production by 1.2 million barrels per day – more than previously discussed reductions of 1 million barrels per day.

According to one of the delegates at the two-day meeting of the cartel member countries, which ends today in Vienna, Russia has also agreed to participate.

This development took place after Iran gave the green light to the organization to reduce the yield. OPEC agreed to reduce oil production by 0.8 million barrels per day, while the remaining 0.4 million barrels per day will be provided for non-cartel countries.

Tehran has agreed to the proposal after a compromise has been reached with its main opponent, Saudi Arabia, being excluded from the redundancy regime for the US sanctions imposed on the country.

The breakthrough in the talks followed a series of bilateral meetings convened by Russia, which proved to be a major mediator between Saudi Arabia and Iran.

Iran was a major barrier to reaching an agreement, but after the disagreements have been overcome, talks could have been directed at non-cartel countries and Russia in particular.

Manufacturers will use October output as the basis for the cuts, and a new assessment of the agreement is expected to be made in April.

Oil collapsed by more than 30% earlier this month compared to its four-year high in October after worries about overproduction were boosted by some US concessions on sanctions against Iran and the continuing rise in US oil reserves and production.

Earlier on Thursday, Saudi Energy Minister Khalid al-Falih said that the possible reduction in yield for countries involved could range from 0.5 million barrels per day to 1.5 million barrels per day.

In his words, a reduction of 1 million barrels would be acceptable and so far this is the main scenario. However, he added that Russia would have to commit to a significant reduction.

Sources from the Russian Energy Ministry said Moscow was willing to cut its yields by 200,000 barrels per day, more than initially proposed a 150,000-barrel contraction per day.