Clueless in Alaska

A few notable developments over the past 24H:

First, Russian FM Lavrov’s comments that Russia needs to be involved in any security guarantees to Ukraine. It is simply ridiculous to think that the country responsible for Ukraine’s insecurity (it invaded) thinks it should have some say in providing future security to the country it has been attacking. Thats an oxymoron if ever I saw one. What Lavrov seems to have in mind is a new Budapest memorandum - that’s the one where in exchange for Ukraine giving up its huge nuclear arsenal in 1994, it had it’s sovereignty and territorial integrity assured by Russia, China, the U.S., France and the U.K. Only events - the Russian invasion - proved that that guarantee was not worth the paper it was written on.

Note herein that Trump’s special envoy, Stevie Witkoff, had suggested that Moscow had made huge concessions on agreeing security guarantees for Ukraine when he visited Moscow earlier this month. How naive from Witkoff. Has he any clue when it comes to the issues around Russia - Ukraine? He seems to be clueless when it comes to Putin if he believes the idea that Moscow was prepared to offer serious security guarantees to Ukraine. The reality is that Moscow has made zero concessions on serious security guarantees - it has the opposite interest. And imagine here that Witkoff, Trump etc rewarded Putin with the Alaska summit for the supposed concessions from Russia around security guarantees. This was just amateurish.

Second, the U.S. has seemingly ruled out significant security guarantees from the U.S. to Ukraine as part of any peace feel, according to an article in politico.

https://www.politico.eu/article/ukraine-russia-donald-trump-nato-europe-leaders-us-politics-security-defense/

So Europe is on its own but simply lacks capacity to provide any real assurance to Ukraine - it likely currently cannot defend itself from a Russian attack.

And in the end I just cannot see Europe being able to offer Ukraine enough in terms of credible security guarantees for Zelensky to be able sell territorial concessions to Russia to the people of Ukraine.

So in my mind, the war goes on - Putin wants a long war, Trump is not willing to impose any costs on Putin to change Putin’s narrative and while Ukraine would love a ceasefire the give ups needed are just existential for Ukraine.

Third, reports suggest that as part of the D.C. European leaders summit with Trump, the issue of Orban foot dragging on Ukraine’s EU membership was brought up. I think the idea here from Trump was if he could seal early EU membership for Ukraine that this would provide some kind of additional security guarantee. This is complete bollocks (excuse my French) though as the EU has no security infrastructure and I have little doubt that Putin would have attacked Ukraine even if it was an existing EU member - as he still would the Baltic states if the opportunity arose and he saw NATO weakness and chance then to sow further division in NATO. EU membership will be really important I think for helping anchor reform, growth and development once peace is delivered - and helping sustain the Ukrainian economy to be able to sustain a military industrial complex to help it defend itself. But I think membership needs to be a transition - over perhaps still 5-10 years, to ensure the anchor of potential membership acts as an anchor for reform. Immediate NATO membership would deliver cast iron security to Ukraine, not EU membership.

In any event, Trump called Orban, asked for him to end his opposition to Ukrainian EU membership but Orban refused to comply.

Fourth, reports of a step up in Russian missile and drone attacks on Ukraine - including therein an attack on a U.S. owned manufacturing facility (Flex) in Ukraine. Remember therein the Trump pitch in pushing the minerals deal on Ukraine, that Putin would not dare to attack US interests, particularly business. Wrong, wrong, wrong! He just did. Again it underlines that the U.S. - Ukraine minerals deal is not worth the paper it is written on, rather like the Budapest memorandum.

https://x.com/stratcomcentre/status/1958435925769220322?s=46&t=32_q5q9ehPzOjr0pU8ggAQ

Fifth, Ukraine continues its own attacks on Russian energy infrastructure. These are proving very impactful as they continue to strike Russian oil refining capability - attacks therein today hit a refinery in Rostov which accounts for 2-3% of total Russian refined capacity. All told Ukrainian strikes seem to have taken out 10-15% of Russian refinery capacity. The results are two fold: a) it is causing petrol/gas shortages for Russian consumers. There are now long queues at gas stations across Russia, which is also hiking prices and inflation. Putin wants a return to the USSR and he is achieving it with the return of queues at gas stations. Well done. b) The inability to refine all crude pumped is forcing Russia to try and export more crude which obviously then puts downward pressure on global crude oil prices, again hitting Russia.

Sixth, it’s interesting that markets had got all excited about peace prospects from the Alaska and D.C. summits.

See the polymarket betting market odds of a ceasefire in 2025 went from 20% to over 40%.

Most think tank folk I know see little hope of Trump’s peace process going anywhere fast. And therein I think now we are seeing the polymarket odds beginning to show something of a reality check.

See my own Twitter poll, which had only 20% of respondents assuming a peace in 2025, which seems fair in my mind.

https://x.com/tashecon/status/1958175708947062964?s=46&t=32_q5q9ehPzOjr0pU8ggAQ

Seventh, given my view that the Trump team seems to be totally out of their depth in understanding Putin, and Russia, notable to hear that Tulsi Gabbard is pushing thru with plans to cut DNI staff by half, including most of their experienced Russia watchers. Pure genius. We have no clue on Russia already, so let’s get rid of the remaining people in the administration who actually know Russia. Luddites.