The Organization of Petroleum Exporting Countries has decided to extend cuts in oil output by nine months until March 2018.
The decision comes as the producer group battles a global excess of crude that has seen prices halve and revenues drop sharply in the past three years.
OPEC oil ministers discussed the developments on Thursday in Vienna, Austria.
The cuts are likely to also be implemented by a dozen non-members led by Russia, which has reduced output in tandem with OPEC since January.
OPEC's cuts have helped push oil back above $50 a barrel this year, giving a fiscal boost to producers, many of which rely heavily on energy revenues and have had to burn through foreign-currency reserves to plug holes in their budgets.
Oil's earlier price decline, which started in 2014, forced Russia and Saudi Arabia to tighten their belts and led to unrest in some producing countries including Venezuela and Nigeria.
The price rise this year has spurred growth in the US shale industry, which is not participating in the output deal, thus slowing the market's rebalancing with global crude stocks still near record highs.
In December, OPEC agreed its first production cuts in a decade and the first joint cuts with non-OPEC, led by Russia, in 15 years.
The two sides decided to remove about 1.8 million barrels per day from the market in the first half of 2017, equal to two percent of global production.
Despite the output cut, OPEC kept exports fairly stable in the first half of 2017 as its members sold oil from stocks.
The move kept global oil stockpiles near record highs, forcing OPEC first to suggest extending cuts by six months, but later proposing to prolong them by nine months and Russia offering an unusually long duration of 12 months.
"There have been suggestions [of deeper cuts]. Many member countries have indicated flexibility but...that won't be necessary," Khalid al-Falih, Saudi energy minister, said before the meeting.
He said OPEC members Nigeria and Libya would still be excluded from cuts as their output remained curbed by unrest.
Falih also said Saudi oil exports were set to decline steeply from June, thus helping to speed up market rebalancing.
OPEC sources have said the Vienna meeting would highlight a need for long-term cooperation with non-OPEC producers.
The group could also send a message to the market that it will seek to curtail its oil exports.
"Russia has an upcoming election and Saudis have the Aramco share listing next year so they will indeed do whatever it takes to support oil prices," Reuters news agency quoted Gary Ross, head of global oil at PIRA Energy, as saying.
OPEC has a self-imposed goal of bringing stocks down from a record high of 3 billion barrels to their five-year average of 2.7 billion.
"We have seen a substantial drawdown in inventories that will be accelerated," al-Falih said. "Then, the fourth quarter will get us to where we want."
OPEC also faces the dilemma of not pushing oil prices too high because doing so would further spur shale-oil production in the US, the world's top oil consumer.
The US now rivals Saudi Arabia and Russia as the world's biggest producer.
Al Jazeera's Sonia Gallego, reporting from Vienna, said that "although [US shale production] has evolved from what it was years ago - it has had to cut back and reinvent itself - the Saudis have maintained that that level of production is not going to affect OPEC."
Source: Al Jazeera and news agencies