Opec has told its members to strictly limit their production to agreed quotas as Brent crude dipped below $100 a barrel for the first time since April.
After talks in Vienna, Opec president Chakib Khelil said the measures to curb over-production amounted to a cut of 520,000 barrels a day within 40 days.
North Sea Brent fell $4.54 to $99.04 on Tuesday before rising to $100.34, while US Brent fell $3.08 to end on $103.26.
Prices have sunk from a record of more than $147 a barrel seen in July.
The price has since fallen by nearly 30% as a global economic slowdown has reduced demand for oil.
Supply has also been increased in recent months by some Opec members - principally Saudi Arabia.
Meanwhile, Indonesia has said suspended its membership of Opec.
"The conference regretfully accepted the wish of Indonesia to suspend its full membership in the organisation and recorded its hope the country would be in a position to rejoin the organisation in the not too distant future," Opec said in a statement.
Compromise
After the late-night talks in Vienna, the group announced it had decided to "strictly" comply to the production ceilings agreed in September last year, which amount to 28.8m barrels a day excluding Indonesia and Iraq.
It linked the falling price of oil to falling economic growth, a stronger US dollar, easing geo-political tensions and greater supply.
 Supply has also been increased in recent months by some Opec members |
"All the foregoing indicates a shift in market sentiment causing downside risks to the global oil market outlook," a statement said.
The effect of the measures, according to Algerian Oil Minister Chakib Khelil, who chaired the meeting, will be a cut of about 520,000 barrels a day.
"Actions [to curb output] will be taken by members as soon as they can, that means in the next 40 days," he said.
Opec members will re-assess the situation when the meet again at the end of the year.
The BBC's Bethany Bell in the Austrian capital says the move is a compromise meant to avoid new turmoil in the oil markets, but it also reflects Opec's attempts to stop the recent falls in global prices.
