On February 24th, 2025, the Russia-Ukraine war entered its fourth year, making it the longest and deadliest conflict in Europe since World War II. In 2022, Russia’s President Vladimir Putin launched what he called a ‘special military operation,’ declaring the goals as ‘denazification’ and demilitarisation of Ukraine and an end to the alleged ‘genocide’ of Russians there. Russia currently occupies approximately 20% of Ukraine’s territory, with casualties on both sides estimated to be between 400,000 to more than 800,000, though these numbers could be significantly higher. The invasion also triggered a massive refugee crisis, with around 8 million Ukrainians internally displaced and more than 8.2 million having fled the country, thereby creating Europe’s largest refugee crisis since World War II.

After three years of fighting, the situation has been changing rapidly in February 2025, with United States President Donald Trump pushing to ‘make a deal’ to end the war. The US-Russia negotiations, Trump’s $500 billion resources-for-aid proposal to Ukraine, his apparent disregard for Ukraine’s and Europe’s positions, and the early concessions Trump’s team has made, have raised concerns in Ukraine and wider Europe about their role in the negotiations and the security of Ukraine. The fear is that a peace agreement would be made that would freeze the conflict along the current front line, leaving Ukraine vulnerable to future Russian aggression. Ukraine’s President Volodymyr Zelenskyy has insisted that Ukraine will not accept any peace deal ‘made behind our backs.’

Situation on the battlefield

Throughout 2024, Russia has been making slow gains in eastern Ukraine, seizing over 4,000 square kilometres and capturing several cities. Russia is undeterred by the massive cost in lives and equipment, losing up to 1,500 soldiers per day. According to Ukraine’s Minister of Defence Oleksandr Syrskyi, Russian forces suffered over 400,000 casualties in 2024. In early 2025, reports emerged of Russian forces sending wounded soldiers back into assaults without treatment and of using donkeys for transport on the front line. Russia has been accused of executing and torturing Ukrainian prisoners of war, with the United Nations concluding that Russia’s use of torture amounts to crimes against humanity.

While Russia has been making gradual advances in eastern Ukraine, Ukraine launched a surprise incursion into Russia’s Kursk Oblast in August 2024, followed by a new offensive in January 2025. The offensive aimed at diverting Russia’s resources, is much smaller and has seen limited success. However, Ukrainian forces managed to seize land inside Russia. Reports emerged in October 2024 that North Korea was sending troops to aid Russia to defend against the offensive. Ukraine is also continuing its campaign of strikes inside Russia, targeting oil and gas infrastructure, weapons depots, and military airfields.

Since 2022, Western countries have provided Ukraine with continuous support, even if it has sometimes felt too little and too late. Ukraine has received around $132 billion in aid from European countries, and $114 billion from the US, of which roughly $65 billion has been immediate military aid. However, the signs of war fatigue among Ukraine’s allies have been increasing throughout 2024. Russia has at the same time been building increasingly close partnerships with China, North Korea and Iran, receiving military supplies and, in North Korea’s case, troops, likely in exchange for military technology and intelligence.

Both Russia and Ukraine also continue to heavily engage in cyberattacks. Russia’s Sandworm group, part of its military intelligence agency, GRU, has continuously targeted Ukrainian military with backdoors as part of its espionage efforts. The malware is typically spread to devices using cracked or fake versions of legitimate software, or via the exploitation of known vulnerabilities. Ukraine, on the other hand, continues to engage mostly in distributed denial-of-service attacks, to disrupt the networks of Russian state-owned companies, including those in the oil and gas sector causing them to go offline.

Trump’s peace plan

During his election campaign, Trump vowed to end the war quickly and by February 12th, 2025, after a three-hour phone call with Putin, Trump announced that the two countries had agreed to immediately begin negotiations on ending the war. This was followed by a first meeting of US and Russian delegations in Saudi Arabia on February 18th, 2025, headed by US Secretary of State Marco Rubio and Russia’s Foreign Minister Sergei Lavrov. These negotiations have sparked concerns among European leaders, who fear that Trump may agree to significant concessions to Russia without ensuring Ukraine’s security and sovereignty.

According to US Secretary of Defence Pete Hegseth, Ukraine’s goal of returning to its pre-2014 borders is unrealistic, as is Ukraine joining NATO, and would only prolong the war. He made it clear that the US would not deploy troops to Ukraine under any peace deal and urged European allies to ensure continued support for Ukraine’s future security. Trump has also proposed a ‘resources deal’ to Ukraine, which would grant the US 50% ownership of its resources as compensation for US aid. Trump claimed that Ukraine had ‘essentially agreed’ to the $500 billion deal, pointing to the fact that the US has already spent $300 billion on supporting Ukraine. Ukraine’s vast mineral deposits, including rare earths, are valued to be worth around $15 trillion. However, most of the known rare earth deposits are in the areas occupied by Russia, which would complicate their mining.

Ukraine’s position

While Zelensky’s administration initially welcomed Trump’s ‘resources deal,’ saying that it aligns with the ‘victory plan’ that Zelensky presented in 2024, it has since rejected the proposal due to a lack of security guarantees. Zelensky previously also warned that other countries, such as Iran and North Korea, would mine these resources if Ukraine’s mineral-rich territory is under Russian control.

Zelensky also expressed concerns about the negotiations between the US and Russia without Ukraine and European allies and has ruled out accepting any peace deal ‘made behind our backs,’ emphasising that this is a matter of Ukrainian sovereignty. He has previously warned against freezing the conflict along the current front line, stating that this would inevitably lead to renewed aggression. Ukraine is seeking US and European security guarantees to be included in any peace plan and is concerned about potential concessions that might undermine the country’s sovereignty. Zelensky has also called for the creation of a European army to reduce reliance on the US.

Russia’s position

Russia has welcomed Trump’s initiative, and the negotiations have been hailed in Russia as ‘Putin’s triumph.’ However, Russian officials have made it clear that they are not willing to cede any territory seized in Ukraine. Lavrov also ruled out NATO peacekeeping forces in Ukraine and expressed scepticism about European involvement in the negotiations, questioning Europe’s potential contribution to the talks.

Putin had shown no serious interest in peace negotiations before Trump’s call and has not backed down from his maximalist demands, which include a regime change in Ukraine, a permanently neutral Ukraine with NATO membership excluded, recognition of Russia’s annexation of Ukrainian territories, Ukraine withdrawing its troops from the four regions annexed by Russia, and the removal of Western economic sanctions. Dmitry Peskov, Putin’s spokesman, stated that Putin has ‘repeatedly’ expressed his readiness for peace talks but that Russia’s ‘wider security issues’ must be addressed first. Sergei Ryabkov, Russia’s Deputy Foreign Minister, has stated that all conditions must be met before a peace deal can be agreed, that Russia’s conditions are non-negotiable, and that any talks would have to address the root causes of the conflict, including NATO expansion and the perceived threat from Ukraine.

Russia’s war economy

Putin’s regime is likely seeing Trump’s initiative as a unique opportunity that provides a way out of the war and a peace on favourable terms. Russia continues to experience battlefield losses, and the war is putting an increasing strain on the economy. Russia’s calculation might be that if the US continues imposing stricter sanctions, increases its oil and gas production, and manages to bring down energy prices, Russia may have no choice than settle for a peace treaty.

On the one hand, the country’s economy has shown unexpected resilience in the face of sanctions, shrinking slightly in 2022 but growing in 2023 and 2024. There are a few reasons for this; by 2023, Russia had adjusted to the new reality, finding ways around sanctions and stimulating growth through increased military spending. On the other hand, the situation could be changing and Russia could enter a recession in 2025, caused by hikes in interest rate, triggered by inflation, which is in turn fuelled by a labour shortage that is exacerbated by conscription. The government is planning to increase military spending even more in 2025, further straining the budget. This trend is likely to continue even if the war ends as Russia will have to rebuild its armed forces and military stockpiles. As such, the country’s economic growth can largely be attributed to military spending, and such a dependence combined with the high inflation may lead to a stagnation not dissimilar to what the Soviet Union experienced in the 1980s.

Russia’ inflation is currently close to 10% and in February 2025, the Central Bank of Russia revised its inflation projection upward of 8%. The country’s interest rates are at 21%, with the Central Bank reluctant to raise them further, while Russia’s gold reserves fell by nearly half (46.4%) in 2024. The country has also been using its National Wealth Fund to finance day-to-day spending, with the fund’s liquid assets falling to $38 billion from pre-invasion’s roughly $100 billion. Unusually for him, Putin acknowledged the problem in February 2025, indicating the severity of the situation. The potential end to sanctions and the release of over $300 billion of frozen assets of Russia’s Central Bank would provide crucial funds for mitigating the current situation.

Closing thoughts

The ongoing negotiations are just the beginning of a complicated journey, with the outcome far from clear. It cannot be ruled out that the negotiations with Russia are a tactic to pressure Ukraine to agree to Trump’s deal; his tone was different in January 2025, when he threatened imposing tariffs and further sanctions on Russia if Putin fails to end his ‘ridiculous war’ in Ukraine.

The biggest challenge to negotiating a peace is (mutual) mistrust. Ukraine has reasons to deeply distrust Russia, considering how the country has broken the previous agreements, and ultimately launched its full-scale invasion in 2022. This is why Ukraine keeps insisting on NATO membership – to insure against Russia’s future aggression. Putin, on the other hand, has defined NATO enlargement as the ‘root cause’ of the conflict and it is difficult to see how he would back down. Russia is likely to push for greater concessions than have been voiced by Trump’s team so far, to improve their negotiation position and to address the concern that any compromise could be exploited to weaken Russia.

As it stands, Ukraine is unwilling to accept territorial concessions, and Putin is unlikely to agree to any peace unless he perceives it as advantageous. Some observers have pointed out that were Ukraine to accept Trump’s ‘deal,’ what it would have to hand over to the US would amount to a larger share of its GDP than the reparations imposed on Germany after World War I. Whatever the outcome, Putin will portray any peace as a victory, despite not achieving his initial goals and having had his army largely destroyed. Russian propaganda will describe the annexation of mineral-rich Ukrainian territories and establishing the ‘land bridge’ to Crimea as triumphs. Russia will also present the renewed contacts with the US as a failure of the West to isolate the country. And finally, Russia will position the peace as a victory over NATO, describing Ukraine as a proxy of the alliance.

Putin is also likely to try to use the negotiations to push for changes in Europe’s security architecture, diminish the role of NATO, and reach some sort of agreement on ‘spheres of influence.’ How the war will end is going to be a geopolitical watershed moment with long-lasting consequences for international security and will have a direct impact on the potential confrontations with other authoritarian regimes like China, Iran, and North Korea.

The cut-off for reporting was February 21st, 2025. For information on more recent developments, sign up to our Geopolitical Risk Briefs.