Russia's Military Economy is a Bubble: Why Putin May Make Concessions.

Trump Initiated Direct Talks Between the USA and Russia Regarding Ukraine

US President Donald Trump is actively promoting his peace plan for Ukraine. After meeting with Vladimir Putin and Volodymyr Zelensky, he organized direct talks between the USA and Russia, reports Samuel Ramani, a researcher at the British analytical center RUSI.

Trump's actions, which excluded Ukraine and Europe from the negotiations in Riyadh, aroused outrage from his critics. Defense Secretary Pete Hegseth's statement about Ukraine's inability to restore its borders and willingness to postpone Ukraine's NATO accession also fueled the protests. Former National Security Advisor John Bolton believes that these steps by Trump equate to capitulation to Putin.

'While Europe's and Ukraine's concerns about Trump's approach to American-Russian diplomacy are understandable, there may be a silver lining. Russia suffers serious losses on the battlefield and has a weak military economy, creating opportunities for effective negotiations. If Trump further weakens the Russian economy by boosting US shale gas production and lowering energy prices, Putin may be forced to stop the war that he deems existential. Could such a scenario be possible? Predictions from Russia's Central Bank confirm that inflation in Russia will rise, while consumer goods prices are increasing at a much faster rate. This will lead to a serious life crisis. This crisis will worsen conditions for low-income Russians and exacerbate inequality in Russia. Thus, ethnic minorities in Russia may somewhat withdraw their support for its actions in the war'

- believes the expert.

Ramani notes that even with rising oil prices, the energy sector in Russia is in crisis. Decreased sales in Europe and Ukrainian drone attacks on Gazprom's pipeline infrastructure have resulted in a loss of $6.9 billion in 2023. This is the company's first annual loss since 1999. Meanwhile, due to the active counteraction of Russia's shadow fleet and increased energy production in the USA, Putin's war machine may find itself lacking funding.

'Despite these negative economic indicators, Putin still believes he can stand against Ukraine and the weak support from the West. His economy is capable of enduring sanctions, but this will be temporary. He does not want to risk the socio-economic backlash that will follow an economic collapse, so Putin may make unacceptable concessions in Ukraine to avoid such an outcome'

- concludes the author.