OPEC oil production falls as UAE leads supply cuts
ShafaqNews/ Crude oil production from the Organization of the Petroleum ExportingCountries (OPEC) declined last month, as the UnitedArab Emirates (UAE) intensified supply cutbacks aimed at stabilizing global oilmarkets.
Accordingto a Bloomberg survey, OPEC’s output fell by 120,000 barrels per day (bpd) to27.05 million bpd, with the UAE contributing the majority of the reduction.This decline was partially offset by modest production gains in Libya andNigeria, while Iran and Kuwait recorded slight decreases.
SustainedEfforts to Bolster Oil Prices
Forseveral years, OPEC and its allies, led by Saudi Arabia, have been curbingcrude production to support oil prices amid weak global demand and abundant USsupplies. In December, the OPEC+ coalition once again deferred plans to reinstatepreviously halted output.
However,adherence to production limits remains uneven across member states. While OPECdata shows that the UAE is largely compliant with its quota, independentestimates, including Bloomberg’s survey, suggest the country may still beproducing above its agreed limit.
InDecember, the UAE took significant steps to demonstrate its commitment to thecoalition’s objectives, reducing oil exports to an 18-month low. Data fromtanker tracking shows state-run ADNOC has further tightened allocations ofcrude shipments to some Asian customers for January and February.
Adjustmentsto UAE Production Plans
Aspart of its dedication to OPEC+ goals, the UAE postponed an agreed increase of300,000 bpd in additional production. Initially planned to begin in January,the ramp-up will now start in April and be distributed over a longer period.Despite these measures, the survey indicates the UAE’s December productionstood at approximately 3.2 million bpd, several hundred thousand barrels aboveits official limit.
MarketOutlook
Oil markets began the new yearon a strong footing, with prices reaching a three-month high above $77 perbarrel in London on Monday. This surge was attributed to tightening MiddleEastern markets and cold winter conditions.
Yet, analysts remain cautiousabout sustained price increases. The International Energy Agency (IEA) projectsa global oil surplus of at least 1 million bpd in 2025, fueled by slowingdemand growth in China and robust output from the US, Guyana, and Canada.
Politicaldevelopments may also reshape the market landscape. The incoming USadministration has signaled intentions to reimpose stringent sanctions on Iran,targeting its oil exports. These measures could curtail flows to key marketslike China, Tehran’s largest customer, though analysts, including GoldmanSachs, predict only a modest impact on overall production.
Shifts in OPEC MemberProduction
Thesurvey highlighted fluctuations in production across OPEC member states. Iran’soutput declined by 40,000 bpd to 3.32 million bpd in December but remains nearits highest levels since US sanctions were last intensified. Libya continuedits recovery from recent political turmoil, adding 40,000 bpd to reach 1.23million bpd, the highest in over a decade. Meanwhile, Nigeria saw a 40,000 bpdincrease, bringing its production to 1.51 million bpd, supported by new fielddevelopments.
