Oil prices surged today to $50 per barrel, after OPEC and Russia reached what the oil producing cartel described as "a historic agreement" in Vienna. Under the deal, their output will be reduced by 1.2 million barrels per day starting in January, the first time since 2008 that OPEC nations have agreed to cut production.

One unprecedented aspect of the deal is that Russia, a non-member state, has agreed to cut its own production by 300,000 barrels daily. Saudi Arabia, the cartel's biggest producer, will take the biggest cut, with a reduction of 486,000 barrels, bringing its daily output to just above 10 million barrels.

The agreement is also an important victory for Iran. Saudi Arabia's rival, which is still recovering from international sanctions, will actually increase its production to 3.8 million barrels a day. More importantly, the Vienna meeting showed that OPEC, which many observers believed was rapidly losing relevance, was capable of pulling off a major deal with global implications.

Still, for all the triumphalism, the agreement relies solely on the members' self-compliance, and there's reason to believe that not all countries will be sticking to the agreed cuts, especially those struggling economically. Either way, the latest events are a reminder that greasing the wheels of the global economy requires coordination — and negotiation.