The Saudi Energy Ministry said in a statement on its website that its voluntary cut of 1 million barrels per day will stay in place through the first three months of next year.
Another big question is whether Saudi Arabia and Russia will extend their additional voluntary cuts of 1 million barrels per day and 300,000 barrels per day, respectively, into 2024.
Higher oil prices in turn are likely to spike up inflation, which internationally has been under control, and were on the way down.
OPEC+ would not want a conflagration. It would spook the market and add volatility to oil prices. It would also hobble top producer Saudi Arabia’s Vision 2030 for moving away from oil.
Analysts also expect some disruption in supply of raw diamond as Israel is an important supplier and with Russia already cut from the market due to sanctions.
Analysts say Netanyahu is on the backfoot, and he cannot be seen as weak. This could lead to further escalation and disruption in oil supply.
Observers said higher energy costs would complicate the central bank's work as they accounted for a large part of the surge in prices in the wake of Russia's invasion of Ukraine.
The countries' moves could increase inflation and the cost for motorists at gasoline pumps. Saudi Arabia said it will continue to monitor the market and could take further action if necessary.
There is limited room for the RBI to sound dovish as it has explicitly shifted to guide inflation toward the 4 per cent target.
"Growth in the world's demand for oil is set to slow almost to a halt in the coming years," the IEA said.
India’s largest private fuel retailer, already announced selling petrol and diesel at Re 1 less than the fuel sold by government-owned companies.
"Oil prices are under pressure... as the glow from Saudi's supply cut fades and the reality of the sluggish demand backdrop sets in," an expert noted.