Terraform providers updates are not automatically taken into account once staged and unzip into the .terraform.d/plugins directory
To upgrade the Terraform providers after they have been staged into the above location, run the following command:
terraform init -upgrade
$ terraform --version
* provider.null v2.1.2
* provider.oci v3.35.0
* provider.template v2.1.2
Now the oci providers will be running at the version 3.35.