I'm so sorry, I just browsed your question, and I'll try to answer it.
In theory, if you choose 32GB for the disks of Azure cloud virtual machine while Your account is the first time you book a service, there is no way to downgrade to 16GB for your Azure CVM.
But if you need a system disk about 16GB less than 32GB, you can part a partition from the default 32GB disk.
Or,
Solution-A:
Re-create VM for decreasing disk size, please refer:
Azure VM: Decrease The Disk size.
Firstly, you can back up your formal OS disk data;
Secondly, you create a new 16GB data disk;
Thirdly, you recover your OS disk data to that new 16 GB data disk;
Also,
Solution-B:
Do not re-create VM for decreasing disk size, please refer:
Shrink an Azure VMs OS Managed Disk using PowerShell.
I do highly recommend you have a view about the reference!
OVER!