The tug of war between oil producing countries is far from over despite vacillation in oil prices. Now, Russia has said it will not hesitate to push up oil production to record highs. Significantly, the announcement comes a few days after an aborted global deal to freeze oil output.

Last week, Saudi Arabia-led OPEC producers tried the move in Doha but Iran refused to join the production cut brigade and it failed. Saudi Arabia had said it can flood more output and hit 12 million to overtake Russia as the world’s largest producer.

“They (Saudis) have the ability to raise output significantly. But so do we,” Russian Energy Minister Alexander Novak replied at the international energy conference in Moscow.

According to Reuters, OPEC member Venezuela is concerned that prices could crash in the next few weeks if producers do not agree to resume dialogue and oversupply will loom.

In fact, Saudi had used over production as a tool to drive out many high-cost producers from the oil market. When oil prices plunged to below $30 per barrel in January from a high of $115 in July 2014, Saudi Arabia said it would raise output. Saudi has enough spare capacity and the advantage as a low-cost producer can help it push output to beyond more than 12 million BPD.

“Of course, they (Saudis) can increase output. They have been steeply rising drilling volumes recently,” noted Lukoil Chief Executive Vagit Alekperov, whose company has been drilling for gas in Saudi Arabia. Meanwhile, Iran has made clear that it will raise output to regain market share to make up for the loss suffered under Western sanctions.

The Russian minister expects oil prices to rise $50 a barrel in 2016 and further from 2017 because of a looming deficit in investment for crude production.

Meanwhile, crude prices showed an uptick on Thursday, after the International Energy Agency (IEA) said non-OPEC production would see the biggest fall in 2016, reports Reuters. The IEA’s Chief Fatih Birol said low oil prices have hampered investment. There had been a 40 percent decline in investment in the past two years with steep fall in the United States, Canada, Latin America and Russia.

The comments led to a reversal in crude prices. The upshot was visible when Brent crude futures surged to $46 a barrel by 0650 GMT, after falling to a low of $45.23 per barrel on Thursday.