The oil bears are firmly in control. That was the primary takeaway from the meeting of the Organization of the Petroleum Exporting Countries (Opec) and its allies on Sunday. Oil prices have slumped by a fifth over the past month on the back of rising US shale output, waivers for a number of countries undercutting the Iran sanctions and increased supply from major producers such as Saudi Arabia and Russia.

So far, so good for the National Democratic Alliance government. Dropping oil prices ease the strain on the current account—and on public sentiment as the country heads into general elections. But it might not remain that simple. Opec and its allies are unhappy about the reign of the oil short sellers—enough so that the majority of the Opec nations and its allies supported a production cut at the Sunday meeting.

If this indeed happens early next year—according to reports, Saudi Arabia favours a cut of half a million barrels per day in December—and oil prices rise as a consequence, so will the fiscal strain here and the chances of the prices becoming an electoral issue.

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