Over the past several months, the conflict between Ukraine and Russia has continued with no signs of stopping any time soon. According to Russian and Ukrainian defense ministries, Ukraine launched a record 7,347 drones into Russia throughout March, while Russia launched at least 6,462 drones and 138 missiles into Ukraine during the same period, exceeding the monthly record for Russian long-range attacks.
On April 10, Russia and Ukraine agreed to a 32-hour temporary ceasefire during the Orthodox Easter celebrations for the first time since 2022. However, both sides traded allegations of breaking the ceasefire, with thousands of violating drone strikes reported.
Although peace negotiations continued for another round in February, both sides remain at an impasse due to conflicting demands. Further talks have not been possible following the outbreak of conflict in the Middle East, which has diverted both international attention and the involvement of the U.S.
Escalation in infrastructure strikes disrupts Russian energy sector
Since the end of February, the war between Russia and Ukraine has been marked by a sharp escalation in attacks on industrial facilities and critical infrastructure, which has in turn led to supply chain disruptions and power outages.
In March, attacks on Russia’s oil and gas industry intensified, with at least 15 strategic facilities damaged. In addition, several chemical enterprises were damaged by drone attacks, resulting in temporary production shutdowns.
Ukrainian drone attacks on Russia’s oil export facilities over the last two months have further disrupted export operations. Attacks on the ports of Ust Luga, Primorsk, and Novorossiysk are estimated to have paralyzed up to 40% of the country’s oil export potential. On March 25, crude oil and oil product loadings were halted at the Port of Ust-Luga in Kingiseppskiy rayon following a drone strike that targeted Novatek PJSC’s oil facilities at the port. According to reports, shipments of crude oil and petroleum products from Baltic ports dropped by 80% after the strike. So far, Ukraine appears to be succeeding in its attempts to render Russian port and oil infrastructure unstable and more costly to operate.
Targeted strikes on logistics deepen operational disruptions across Ukraine and Russia
Russia has further intensified large‑scale missile and drone attacks on Ukrainian logistics and port infrastructure sites, amounting to at least 12 attacks on ports between January and April. The civilian maritime infrastructure at the Port of Odesa was hit hardest by the attacks and sustained significant damage by drone attacks in April, although the port’s critical facilities continue to operate normally. Attacks on the assets of Ukrainian state-owned rail operator Ukrzaliznytsia have also continued, resulting in the disruption of freight rail operations across Ukraine.
Meanwhile, Ukrainian forces have targeted Russian airports multiple times, leading to flight disruptions across the country. Attacks have targeted four airports near Moscow and forced temporary airspace closures in the area that disrupted flights nationwide. Attacks further targeted Pulkovo International Airport (IATA: LED) in St. Petersburg, as well as major airports in Volgograd, Kazan, Samara, and Ulyanovsk.
As Russia and Ukraine continue to trade attacks, there is currently no indication of a ceasefire agreement in the works. Over the next several months, military strikes are likely to continue at their current intensity amid an ongoing impasse in negotiations between Russia and Ukraine. However, severe damage or increased international pressure following the outbreak of war in the Middle East could provide support for either side to push for an agreement.
Scenario 1: Military strikes continue at current intensity with no further progress in negotiations
Russia and Ukraine have once again reached a negotiating impasse after numerous attempts to achieve consensus at the discussion table. A recent round of talks held in Abu Dhabi, United Arab Emirates in February yielded only a prisoner swap, after which negotiations fell off track again. Since these talks, the negotiation process has largely halted amid escalating military tensions in the Middle East.
Russia and Ukraine continue to maintain conflicting negotiating positions. Russian officials insist that Ukraine renounce the restoration of its pre-2022 borders, seeking to formalize the territorial gains it has achieved and thereby secure at least a partial strategic victory amid limited military successes and significant economic losses. From the Ukrainian side, negotiators have made it clear that discussion of territorial concessions can take place only after a package of legally binding international security guarantees is agreed upon, which Russian negotiators have rejected.
Amid this lack of progress in negotiations, continued military strikes at the current level of intensity remain the most likely outcome in the short-to-medium term. Both sides’ demands have stayed largely the same throughout the course of the war regardless of damages done, and neither Russian nor Ukrainian negotiators have shown much willingness to adjust these demands. Additionally, no further rounds of talks have been announced. As such, companies can expect military strikes affecting key production, logistics, and infrastructure sites to continue over the next several months.
Scenario 2: Severe damages force Russia or Ukraine to negotiating table for permanent agreement
Throughout the course of the war, both Russia and Ukraine appear to have calculated that if enough damage can be done to the other side’s physical or human assets, economic necessity or political opposition will force the other side to make concessions. So far, this strategy of attrition has yet to come to fruition.
After Russia miscalculated Ukraine’s military ability to fend off its initial invasion, Ukraine has continued to hold on to its key demands and has ramped up offensive military strikes on Russia in the last year, despite widespread infrastructure damage and high casualties. Conversely, while Ukrainian strikes have hurt key Russian economic sites and led to significant loss of life, Russia’s political will for the war appears relatively intact.
If the conflict continues unabated, enough damage could theoretically be inflicted to either side to force negotiations to advance. It is unclear what type of damage would satisfy that condition, as both countries have already targeted a wide range of sites, including ports, airports, energy infrastructure, military manufacturers, and other major economic facilities, all to no avail. However, in the absence of outside intervention, this strategy appears to remain the most plausible way that either country could change their demands or accept compromises in the medium- to long-term.
If negotiations advance in this manner and Ukraine and Russia are able to come to a permanent agreement, the end of direct military conflict would enable both countries to begin rebuilding affected infrastructure, allow soldiers to return to civilian activities, and stabilize long-term conditions for business operations in conflict areas. However, settling the war through attrition would likely leave vast physical damage that needs to be rebuilt following any peace agreement, and areas affected by the fighting could face worker shortages for the foreseeable future as former residents may hesitate to return. As a result, returning to pre-war production and export levels in areas affected by the war would likely take many years even if a permanent agreement can be reached.
Scenario 3: Protracted conflict in the Middle East drives international pressure for peace agreement
While the recent outbreak of war between the U.S., Israel, and Iran has not had a major impact on the Russia-Ukraine war at the time of writing, a protracted conflict could negatively affect Ukraine’s position in negotiations. Since the beginning of the conflict, the U.S. has largely diverted its attention away from the situation in Ukraine and towards the Middle East, and no further peace talks involving Ukraine, Russia, and the U.S. have taken place. While the U.S. is unlikely to completely ignore the Russia-Ukraine war in the coming months, a further military escalation in the Middle East would likely take precedence, diminishing the role of the U.S. as an ally for Ukraine.
Moreover, long-term fuel disruptions stemming from attacks in the Strait of Hormuz could increase international appetite for Russian oil and gas products. If severe disruptions persist, even current allies of Ukraine could see increased public pressure to remove or reduce trade restrictions on the imports of Russian oil products. In turn, this could mitigate some of the economic fallout faced by Russia since beginning the conflict, strengthening domestic resolve to continue the military offensive.
Alternatively, rather than reducing trade pressure on Russia, allies could push Ukrainian officials to halt attacks on Russian oil industry facilities, or even to compromise on some demands in hopes of reaching a permanent peace agreement and safeguard energy-related interests.
While countries have discussed some measures to relieve sanctions on Russian oil and gas, widespread efforts have not yet occurred. On March 12, the U.S. temporarily removed sanctions on Russian oil products currently stranded at sea to ease international oil and gas flows amid disruptions from the closure of the Strait of Hormuz. On May 19, the U.S. extended the sanctions waiver for a further 30 days. Notably, the temporary waiver has received international criticism and has not significantly lowered oil prices due to Russia’s existing methods for sanctions circumvention.
At the time of writing, no additional major countries have expressed firm interest in removing trade restrictions from Russian oil, gas, or petrochemical products. Lawmakers in the E.U. have directly ruled out reversing the bloc’s planned ban on imports of Russian natural gas products. However, if the conflict in the Middle East further escalates and fuel supply disruptions continue, political pressure from consumers as well as manufacturers and logistics operators to alleviate high energy prices could force governments to reevaluate this position.
On the other hand, Ukraine has recently stepped up its diplomatic efforts to provide defensive missiles and drones to the U.S., Israel, and several Persian Gulf states that have recently suffered Iranian attacks.
Throughout its conflict with Russia, the Ukrainian military has developed an expertise in manufacturing and deploying low-cost interceptor drones that have countered Russian offensive drone attacks. This technology and expertise have become more internationally sought-after amid Iranian drone attacks, and desire for Ukrainian assistance on this issue could provide further international allies for Ukraine.
Additionally, while the Ukrainian government has exercised strict controls on the export of weapons it manufactures, Ukraine-owned facilities have significant capacity to produce more missiles for export. Ukraine has now signed defense export agreements with Saudi Arabia, Qatar, and the United Arab Emirates, with more deals reportedly to be announced shortly. These deals will make lower-cost Ukrainian drones more available for Middle Eastern countries in need of defensive support following Iranian attacks, in exchange for much-needed financing and fuel supplies for Ukraine.
Additionally, Ukrainian efforts to prove a reliable ally for the U.S. in the Middle East could warm U.S.-Ukraine relations amid continued criticism from the Trump administration on President Zelensky, especially as Russia continues to aid Iran’s military in the conflict. The U.S. and Ukraine are now reportedly close to reaching a new defense deal that would allow Ukraine to export military technology to the U.S., as well as to manufacture drones jointly with American companies. It is unknown when the deal could be finalized.
If the conflict in the Middle East leads to continued drone attacks on Gulf states, demand for Ukrainian defensive technologies is likely to grow as countries’ stocks decrease. Proceeds from higher Ukrainian military exports could bolster Ukraine’s economy to continue resistance against Russia. Moreover, increased reliance on Ukrainian drones could push Gulf states and the U.S. to move further away from Russia or even demand a Russia-Ukraine ceasefire agreement to increase Ukrainian export capacity.
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