How Likely Is a Russia-Ukraine Deal?
In this article, Andrew Zoeller of Energy Intelligence's Research and Advisory unit examines the prospects for a Ukraine deal.
The prospects for peace negotiations in Ukraine are brighter than they have been since the early days of Russia’s invasion, and an agreement to halt fighting looks likely to be reached this year. Yet, the road remains rocky, and there are key pitfalls that could hamper or undermine a deal — including this week's flare-up of tensions between US President Donald Trump and Ukrainian President Volodymyr Zelenskiy.
White House Drives Shift in Outlook
Trump made peace in Ukraine a cornerstone of his campaign’s foreign policy platform. His early moves — headlined by the phone call with Russian President Vladimir Putin last week and bilateral US-Russia talks this week in Saudi Arabia — indicate he is committed to quickly moving forward and prioritizing a deal. Simultaneously, support for further Ukraine aid, especially among Republicans, is eroding, and a deal would constitute a key early political win for Trump.
There are strong reasons to believe Trump will reach a deal. For one, he’s seen as inclined to overlook complicated details in a push to reach an agreement. He is also more sympathetic to Russia — and skeptical of Ukraine — than his predecessors (as per his comments on Ukraine this week) and is more likely to make major concessions to get Moscow on board. Trump previously made agreements over the heads of US allies without their input in his first term, such as the peace deal with the Taliban in Afghanistan or his treatment of the Kurds in Syria vis-a-vis the Turks, and may do so again. Additionally, concerns about Russia attacking Ukraine again, or another Nato country, are a longer-term question, which Trump — and arguably many in Europe — will likely downplay in favor of shorter-term political considerations.
The general outlines of a possible deal are coming into view. Comments from US officials like Secretary of Defense Pete Hegseth suggest that previous US policy cornerstones like maintaining Kyiv’s territorial integrity or its right to join Nato are now less important than ending the conflict. Washington is reportedly talking to European allies about what security guarantees they could provide and what support they need for these. Accordingly, the Trump administration likely views Ukraine giving up land and foregoing Nato membership in exchange for security guarantees — which may or may not include a US guarantee — as the most desirable outcome.
Ukraine and Europe Will Get on Board
The US emphasized that Ukraine and Europe will be brought into the process later. Yet their exclusion from initial talks is generating fear that the US will impose an agreement it reaches on Ukraine regardless of Kyiv’s opinion. Nonetheless, there are strong incentives for Ukraine to eventually agree to a deal despite its current protests.
While Kyiv has demanded a return to its pre-2014 borders, it is likely more willing to make concessions for peace now than in the past. The war has had a devastating impact on the country. Verifiable figures are in short supply, but according to Zelenskiy, Ukraine’s military suffered over 46,000 killed and nearly 380,000 wounded. Millions of civilians have either fled or died. The economic toll has also been steep, with the country’s real GDP falling 22% from 2021 to 2024.
The prospects of Ukraine recovering lost territory by force look increasingly grim, as Russia’s grinding military campaign makes steady, albeit slow, gains. Despite dramatically improving its military-industrial capacity, Ukraine is still reliant on foreign suppliers. Only 30% of the equipment it used last year was manufactured domestically, according to Zelenskiy. As a result, Ukraine may risk losing even more territory if US support dries up, and Europe cannot fill the gap. And Europe does not have the money, materiel or appetite to do this.
It was also always going to be difficult for a Ukrainian leader to make the concessions needed for a diplomatic solution. Under these circumstances, Zelenskiy could point the finger at Trump, helping to temper some of the domestic political blowback.
Despite their protests, many in Europe may also eventually come around to the US-led process as well. For one, Europe does not have a viable, alternative peace plan that it could put forward even if it wanted to continue supporting Ukraine. Electoral support for Ukraine-skeptic, far-right parties is also growing, adding pressure to make a move sooner rather than later. Many European leaders may also decide it is better to cut losses now and focus on bolstering their own defense capabilities against future, more direct threats, including hitting Nato spending targets as new military spending plans bear fruit. Put simply, many in Europe will likely decide that it makes more sense to join and try to influence the US-led initiative, largely because it cannot sustain the conflict without US support.
Moscow at the Table
Conflict fatigue and growing stresses could also make Russia more open to diplomacy, particularly with a US leadership seen as favorable to Moscow. Advances in eastern Ukraine have been costly and slow, and Russia has failed to dislodge Ukrainian forces from Kursk. Russian military casualties were running at a rate of 1,200-1,350 per day in October-November 2024, according to US and UK estimates, and manpower and material shortages are a growing concern. Moscow is trying various avenues to replenish its ranks — such as via North Korea — to avoid another unpopular mobilization, while burning through its massive Soviet-era stockpiles of key military equipment.
While Russia has fared better economically than anticipated, it has not been unscathed. Defense spending is boosting GDP but masking growing problems and crowding out other sectors. Russian energy firms face growing tax bills and higher borrowing costs. Interest rates sit at 21%. Inflation is rising as the economy is overstimulated and importers increasingly struggle to pay bills amid US-led financial sanctions, limiting goods flows. Labor shortages are also mounting. The Russian Central Bank is forecasting an economic slowdown this year and next. Trump’s earlier threats to boost sanctions to end the war added further pressure, while an agreement would open the door to some form of sanctions relief.
Ending the conflict would also offer strategic and political benefits for Moscow, even if these fall short of the goals Moscow set at the start of the campaign, including regime change in Kyiv and the “demilitarization” and “denazification” of Ukraine. Stopping Nato expansionism was one of Russia’s major prewar objectives, and formally keeping Ukraine out of the organization would represent an important victory. Agreeing to such a plan could also drive a wedge between the US and its European allies, making it more attractive still. Meanwhile, territorial gains could be sold domestically, while bringing geopolitical benefits such as a land bridge to Crimea.
Pitfalls Could Still Derail Process
Trump is mercurial, and his positions could shift, making it hard to land an agreement. The administration’s attention could also wane, especially if negotiations prove challenging. Meanwhile, Europe and Ukraine’s lack of participation in the early rounds of talks is a double-edged sword. While it may reduce potential distractions and competing interests, it also means both lack buy-in. Ukraine has said it will not agree to an ultimatum or sign on to any deals it did not play a role in negotiating.
If faced with a deal that it views as existentially bad, Kyiv may also still think it better to walk away, particularly if it maintains support in European capitals. Despite not being able to fully compensate for US military and economic aid, Europe has dramatically increased defense spending and could provide more aid than in the early days of the war. Ukraine’s own increased defense spending could also help cover some of the gap. But this would be a high-risk tactic.
Russia could also walk away. In addition to Crimea, Moscow claims all of the Donetsk, Luhansk, Kherson and Zaporizhzhia oblasts, despite not controlling them in their entirety. Previously, Putin indicated that Ukraine would need to withdraw from these regions in their entirety as a condition for peace, which could be a major sticking point if neither side backs down — although Ukraine’s occupation of a small piece of Russia’s Kursk Oblast sets the scene for a potential tradeoff.
Postwar or ceasefire security arrangements could also be problematic, even if Ukrainian membership in Nato is excluded. Critically, the Kremlin has so far rejected the presence of troops from Nato countries, which could be required for Kyiv to agree to a deal. Ukraine may be especially wary given the failures of past security agreements that lacked more muscular support like the Minsk Agreements and Budapest Memorandum.
Finally, sanctions will be critical. The US imposed many via executive orders that could easily be rescinded, but some require congressional review. Congress instituted others, and it may be difficult for Trump to garner enough legislative support to repeal them. The EU and the UK have their own sanctions and policies, such as the embargoes on Russian crude and products. Moscow would almost certainly want these to be included in any deal.
Despite all these potential challenges, we consider it most likely that a deal is reached. We have updated our scenarios for the conflict, with a negotiated deal now rated as the most likely outcome for 2025.
| Energy Intelligence Ukraine Scenarios, 2025 | ||
| Scenario | Odds | Description |
| Negotiated Deal | 70% | Russia, the US and Ukraine enter negotiations as the economic and human costs of the conflict rise. |
| Trump’s election and growing strains in Europe make the West eager for a deal. | ||
| This makes a negotiated conclusion more likely than at any point since the conflict’s early days. | ||
| Yet, the two sides remain far apart. Moscow will drive a hard bargain demanding security guarantees and territorial concessions, which may be hard for Ukraine to accept. | ||
| Pressure Rises, Tensions Escalate | 10% | If Russia fails to compromise, Trump has mooted raising pressure on Moscow for leverage. |
| This could see Trump pressure Congress to agree another military assistance package to Ukraine and/or impose new sanctions. | ||
| Trump will push Europe to contribute more to Ukraine’s defense. | ||
| In this scenario, there is a strong likelihood that political and military tensions escalate. | ||
| Ukraine Support Dwindles | 20% | Growing skepticism in the US and Europe limits the scope of aid, particularly if Kyiv is viewed as the key stumbling block to peace negotiations. |
| Russia, now helped by North Korea, pushes on with its grinding offensive, gaining more momentum. | ||
| Military advances pick up, putting a weakened Ukraine at a growing disadvantage. In an extreme version of this scenario, Ukrainian resistance collapses. | ||
| Source: Energy Intelligence | ||
Andrew Zoeller manages Energy Intelligence Risk Research, conducting analysis of operating and investment conditions in oil- and gas-producing countries, as well as broader macroeconomic, geopolitical and energy transition risks facing the sector. He is also responsible for the data models underpinning Energy Intelligence’s proprietary Country Risk Index and Transition Risk Index data tools.