Oil prices rise by 5% after OPEC surprise output cut decision  

Oil prices rise by 5% after OPEC surprise output cut decision  

Oil prices jumped more than 5 perent on Monday after the OPEC+ alliance announced plans to cut oil production by additional 1.16 million barrels per day (bpd), in a surprise decision that will likely exacerbate tension with Europe and the United States. 

Brent Crude rose 5.31 percent to $84.13 a barrel, its sharpest price increase in almost a year.

The move by the 23-member group including Saudi Arabia, Russia, Kuwait, the United Arab Emirates (UAE) and Iraq came after the bloc said in October that it would maintain production cuts at 2 million barrels per day (bpd) until the end of the year.  OPEC+ accounts for about 40% of the world's crude oil output.

Combined and following announcement, oil cuts by OPEC+ members will add up to around 1.16 million bpd, bringing the total volume produced down to 3.66 million, or 3.7% of global demand.

What happened: US crude rose $4.26 to $79.93 and Brent oil futures hiked up $4.48 to $84.37 a barrel, according to Oilprice.com on Monday at 4:27 a.m. ET, after news that major oil producers will slash their output this year.  

Major stock markets and company valuations in the Middle East rose in the early hours of Monday following the news. Saudi Arabia's benchmark