Crude supply from the Organization of the Petroleum Exporting Countries averaged 30.62 million barrels per day (bpd), down from a revised 30.71 million bpd in November, the survey of sources at oil companies, in OPEC and consultancies found.
OPEC output is now down by 1.13 million bpd from its April 2012 peak of 31.75 million before the European Union implemented an oil embargo on Iran and as Saudi Arabia lifted output to bring prices down from a year-high $128 a barrel.
The survey indicates Saudi Arabia trimmed output in the last two months of 2012 in response to lower demand, helping to bring OPEC supply the closest it has yet been to its 30 million bpd output target since it was set a year ago.
With oil prices above Riyadh’s preferred $100 a barrel but with expectations of slower demand in early 2013, OPEC left the target unchanged at a meeting last month, leaving the door open to informal supply tweaks depending on demand.
“Saudi Arabia still holds the key for changes in OPEC output,” said Carsten Fritsch, analyst at Commerzbank in Frankfurt. “Most of the others produce close to maximum.”
December’s OPEC total is the lowest since November 2011 when the group also produced 30.62 million bpd, according to Reuters surveys.
The biggest decline in supply came from Iraq, the world’s fastest-growing exporter, due to technical and political setbacks. Supply declined to 3.05 million bpd from 3.20 million bpd in November, the survey found.
Bad weather contributed to lower shipments from the country’s south and exports of Kirkuk crude in the north were curbed by a renewed dispute between the central government and the Kurdistan region over payments.
“Delays kicked in over the latter part of the month,” said a source with a company that buys Iraqi crude, referring to Kirkuk exports. “It must be the issue over the Kurdish volume not being delivered into the stream.”
Iranian supply fell further because of U.S. and European sanctions, with exports declining by 60,000 bpd to 1.05 milion bpd for production of 2.65 million bpd, the survey found.
That would be its lowest since 1988, according to figures from the U.S. Energy Information Administration.
Output from Iran dropped sharply last year 2012 due to the sanctions, allowing Iraq to displace Tehran as OPEC’s second-largest producer after Saudi and costing Iran billions of dollars in lost revenue.
The embargo on Iran bars EU insurance firms from covering its exports, hindering imports by some non-EU buyers and making Iran more reliant on its own tanker fleet to supply customers.
Sales may come under further pressure next year as buyers seek to avoid further U.S. sanctions effective in February. India and South Korea are among those planning to cut purchases in 2013, sources have said.
Saudi Arabia’s output was revised lower in November to 9.55 million bpd after the kingdom told OPEC it curbed supply. According to the survey, output slipped again in December.
A drop in output from Libya, where protests shut down an oil port in eastern Libya for four days in December, was the other notable decline in OPEC’s output last month.
The main increases in December came from OPEC’s West African members, Nigeria and Angola, the survey found.
Output in Nigeria rose by 100,000 bpd, recovering from disruptions caused by oil spills, flooding and theft. Exports of only one crude oil grade, Eni’s Brass River, remain under force majeure.
Angola boosted shipments by 80,000 bpd. Up to four more crude oil cargoes were exported in December than November.