Over the past weeks, we are beginning to hear more and more talk of Ukrainian President Zelenskyy heading to the US to present a “plan to end the war” like a salesman trying to renew a customer deal for one final term. Does this mean that we are looking into an upcoming peace settlement or is Zelenskyy simply grasping after straws? In this piece, we’ll try to give you the strategic overview and our forecast of a possible path forward and out of the war, which would have enormous effects on global markets.

Let me kick off by presenting my three main take-aways here:

• As we have predicted throughout 2024, negotiations involving both Russia and Ukraine are very likely to commence in some form during Q4 2024 or Q1 2025.
• Both parties – especially Ukraine – are currently shaping the framework for these negotiations by taking strategic areas of lands, putting pressure on the civilian population and doing diplomatic footwork.
• Ukraine remains in a very poor strategic position heading into negotiations and the most likely outcome is some sort of bitter peace, in essence confirming Ukraine’s partial defeat. Initially, however, the most likely outcome is a fragile cease-fire to create a pathway for further negotiations.

The situation on the ground

The frontline in Ukraine has been a virtual stalemate for a year and a half now. The bloody battle of Bakhmut and Ukraine’s failed summer offensive only underscored the fact that neither side is able to create meaningful breakthroughs and truly test the enemy in the depth. We have had periods of battlefield momentum swinging back and forth, but neither side has had any tactical successes.

Most recently, Ukraine attempted an attack into the Kursk region and gained a foothold, but nothing of major significance. As a response, Russia has opened a salient just north of Donetsk, but again – nothing to truly break the deadlock.

So seemingly, the military situation is status quo? Well, not quite. While Ukraine has managed to hold off Russian attacks, the Russian war machine has swung into full gear and is now (with great help from North Korea and others) massively outproducing Ukraine and its allies. Meanwhile, the Russian recruitment machine is working extremely effectively, allowing Russia to build up significant manpower reserves throughout the frontline. In other words – Russia is much better situated for a long war now compared to 18 months ago, and naturally also much better suited to a long war than the much smaller country of Ukraine.

And the biggest fact on the ground is the simple one that 500,000 Russian soliders are currently sitting on territory which used to be Ukrainian. That’s the harsh facts and the brutal backdrop of the potential negotiations, which neither Ukraine nor NATO has any way of changing significantly.

The geopolitical situation

Initially – let’s understand Zelenskyy’s “plan to end the war”.