OPEC Oil Output Dips in December Amid UAE Maintenance and Iranian Decline

OPEC's oil production fell in December after two consecutive months of increases, according to a Reuters survey released on Tuesday. The survey revealed that a decline in output from the United Arab Emirates (UAE) due to field maintenance, along with reduced production from Iran, outweighed gains from Nigeria and other OPEC members.

The Organization of the Petroleum Exporting Countries produced 26.46 million barrels per day (bpd) in December, marking a 50,000 bpd drop from November. The largest contributor to this decline was the UAE, which saw its output fall by 90,000 bpd. According to a source cited in the survey, field maintenance was responsible for the dip, bringing UAE production to 2.85 million bpd.

Despite the modest reduction in output, OPEC+—the alliance of OPEC members and other oil-producing nations—continued to enforce production cuts in December. This decision was driven by concerns over global oil demand and increased production from non-OPEC+ countries. Last month, the group resolved to delay plans to raise production until April.

Iran also experienced a significant decline, with production dropping by 70,000 bpd. This comes after the nation achieved its highest output since 2018 last year, despite ongoing U.S. sanctions. Analysts, including those from Goldman Sachs, have forecast that tighter sanctions under the incoming administration of President Donald Trump may soon further curb Iranian output.

OPEC’s leading producers, Saudi Arabia and Iraq, maintained steady production levels in December, according to the survey. Overall, the group produced below its implied target for the nine members bound by supply agreements. However, the survey found that Nigeria exceeded its target by the widest margin.

Nigeria increased production by 50,000 bpd in December, driven by higher domestic refinery usage—such as operations at the Dangote refinery—and increased exports. The country also resumed partial operations at its Warri refinery after years of inactivity, according to statements from Nigerian officials in December.

Libya also contributed to rising output, boosting production by 50,000 bpd as it continued to recover from disruptions caused by a dispute over central bank control. Notably, Libya remains exempt from OPEC+ production-cut agreements.

While the survey indicates that the UAE and Iraq are producing below their targets and November data from OPEC's secondary sources shows them not far above their quotas, some other estimates, including those from the International Energy Agency, suggest these nations are pumping significantly more.

The Reuters survey, which aims to monitor market supply, relies on flow data from LSEG, insights from tracking firms like Kpler, and information provided by oil companies, OPEC sources, and consultants. The survey reflects ongoing efforts to balance production amid a volatile global oil market.

By fLEXI tEAM