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By Ahmad Ghaddar, Alex Lawler and Rania El Gamal
VIENNA (Reuters) - OPEC has agreed its first limit on oil output since 2008, sources in the producer group told Reuters, with Saudi Arabia accepting "a big hit" on its production and agreeing to arch-rival Iran freezing output at pre-sanctions levels.
Brent crude futures jumped 8 percent to more than $50 a barrel after Riyadh signalled it had finally reached a compromise with Iran after insisting in recent weeks that Tehran fully participate in any cut.
The source said the Organization of the Petroleum Exporting Countries had on Wednesday agreed on a proposal by member Algeria to reduce production by around 4.5 percent, or about 1.2 million barrels per day.
Saudi Arabia would contribute around 0.5 million bpd by reducing output to 10.06 million bpd, the source said, while Iran would freeze output at close to current levels of 3.797 million bpd and other members would also cut production.
Before the meeting, Saudi Energy Minister Khalid al-Falih said OPEC was indeed focusing on significant cuts and hoped Russia and other non-OPEC producers would contribute a reduction of another 0.6 million bpd.
"It will mean that we (Saudi) take a big cut and a big hit from our current production and from our forecast for 2017," Falih said.
He also said Russia was ready to reduce production.
"Moscow have agreed to reduce their production and cut after our decision," Zanganeh said.
OPEC said it would exempt Iran, Libya and Nigeria from cuts as their output has been crimped by unrest and sanctions.
The September deal was seen as a victory for Iran. Tehran has long argued it wants to raise production to regain market share lost under Western sanctions, when Saudi Arabia increased output.
OPEC member Iraq has also been pressing for higher output limits, saying it needs more money to fight the militant group Islamic State.
Iran and Iraq together produce over 8 million bpd, only slightly behind long-time leader Saudi with 10.5 million bpd.
Bob McNally, president of Washington-based consultancy Rapidan group, said on Twitter that compliance with cuts would be key: "In deals with Russia, OPEC is like (the late U.S.) President (Ronald) Reagan used to say: 'Trust but verify'."
(Additional reporting by Vladimir Soldatkin, Shadia Nasralla and Lisa Barrington; Writing by Dmitry Zhdannikov; Editing by Dale Hudson)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)