Fuelled by a higher oil price with stable liquids output of above 11 million b/d, the Russian economy will grow in 2017. Russia will cut 300,000 b/d of oil production in H1 2017 as part of a deal with OPEC, but we do not expect the deal to be extended after May. This will lead to a recovery in output in H2 2017. A fundamental shift in US foreign policy could see the lifting of sanctions on Russia in 2017. However, we expect EU sanctions to remain in place. Notwithstanding this, investment in those areas impacted by sanctions - Arctic offshore, deepwater and shale oil will remain unattractive under our oil price assumption for 2017. The rise in the oil price and the lack of assets available for sale indicates the window for M&A opportunities will be closing. On the gas front, there will be two key events in 2017. The first 5.5 mmtpa train of Yamal LNG project will be completed and the construction of TurkStream’s first string will start in H2 2017.