Oil Tumbles On Report Of US-Backed Russia-Ukraine Truce Deal

Bloomberg is reporting, according to people familiar with the matter, that Washington and Moscow are aiming to reach a deal to halt the war in Ukraine that would lock in Russia’s occupation of territory seized during its military invasion.

US and Russian officials are working toward an agreement on territories for a planned summit meeting between Presidents Donald Trump and Vladimir Putin as early as next week, the people said, speaking on condition of anonymity to discuss private deliberations.

The US is working to get buy-in from Ukraine and its European allies on the deal, which is far from certain, the people said.

Putin is demanding that Ukraine cede its entire eastern Donbas area to Russia as well as Crimea, which his forces illegally annexed in 2014.

That would require Ukrainian President Volodymyr Zelenskiy to order a withdrawal of troops from parts of the Luhansk and Donetsk regions still held by Kyiv, handing Russia a victory that its army couldn’t achieve militarily since the start of the full-scale invasion in February 2022.

Such an outcome would represent a major win for Putin, who has long sought direct negotiations with the US on terms for ending the war that he started, sidelining Ukraine and its European allies.

What are the odds Zelensky goes for this deal… and will Europe back it?

Zelenskiy risks being presented with a take-it-or-leave-it deal to accept the loss of Ukrainian territory, while Europe fears it would be left to monitor a ceasefire as Putin rebuilds his forces.

Russia would halt its offensive in the Kherson and Zaporizhzhia regions of Ukraine along the current battlelines as part of the deal, the people said. They cautioned that the terms and plans of the accord were still in flux and could still change.

Oil prices immediately tumbled on the report…

The White House didn’t reply to a request to comment.

Kremlin spokesman Dmitry Peskov didn’t immediately respond to a request to comment.

Ukraine declined to comment on the proposals.

It’s still unclear if Putin would agree to take part in a trilateral meeting with Trump and Zelenskiy next week, even if he had already struck an agreement with the US president, the people added.

The Russian leader told reporters on Thursday that he didn’t object to meeting Zelenskiy under the right conditions, though he said they don’t exist now.