Since taking office for the second time, Donald Trump has not only taken a series of actions regarding global trade but has also actively involved himself in the Russia-Ukraine war. While engaging in discussions with Russian President Vladimir Putin, he also appears to have persuaded Ukraine's President to agree to his terms.

U.S.-Ukraine Agreement: Economic Cooperation Without Security Guarantees

During his first cabinet meeting of his second term on Wednesday, Trump announced that the U.S. would sign a major agreement with Ukraine. Ukraine's President Volodymyr Zelensky was expected to travel to Washington on Friday to meet with Trump, a visit that the U.S. president confirmed in his statements yesterday.

The initial draft of the agreement the U.S. sought from Ukraine included a commitment for Kyiv to pay $500 billion from its resource extraction activities---including minerals, oil, gas, and related infrastructure---as a form of compensation for past U.S. aid. Zelensky's team rejected this agreement, which required Ukraine to allocate 50% of its resource revenues to the U.S. but did not provide any security guarantees.

In subsequent drafts, the U.S. withdrew this demand but still insists on establishing a joint fund for these revenues. However, the agreement still does not include a security guarantee. Trump has made it clear that he will not offer such assurances, arguing that economic cooperation inherently provides a form of security.

In his speech on Wednesday evening, Zelensky emphasized the importance of continued U.S. support and stated that the agreement had become acceptable after some of Trump's initial demands were dropped, ensuring that Ukraine would not be left as an indebted nation. However, it is noteworthy that Trump described the deal as a "durable partnership."

Ukraine Claims Drone Strikes on Russian Oil Refineries and Airports

As discussions of a possible ceasefire continue, Ukraine's General Staff of the Armed Forces reported in a social media post yesterday that drones had struck oil refineries at Russia's Tuapse port on the Black Sea. Additionally, two airports in Russian-occupied Crimea were reportedly hit. However, Russia has not confirmed these attacks.

Could U.S. Sanctions on Russia Be Lifted? A Geopolitical Shift Looms

While Trump is on the verge of finalizing an agreement with Ukraine, he is also continuing talks with Russia. Trump and Putin are planning to hold a summit, although no date has been set yet. Meanwhile, Russia has stated that it will not accept the rapid ceasefire that the U.S. is pushing for but remains open to negotiations for a peace agreement.

Russian Foreign Minister Sergei Lavrov announced that Russian and U.S. delegations would meet in Turkey on Thursday to discuss restoring the operations of their embassies. The U.S. has imposed numerous sanctions on Russia due to espionage, cyberattacks, and, ultimately, the invasion of Ukraine. The fact that diplomatic relations are now being reconsidered raises questions about whether other sanctions might also be lifted.

Global Stability at a Crossroads: Economic and Political Outlook

The end of the Russia-Ukraine war is critical for easing geopolitical risks. Especially, if the U.S. lifts its sanctions on Russia, it could serve as a major catalyst for the oil market.

On the other hand, the U.S. increasing its influence over Europe via Ukraine is causing unease among European Union countries. This could add new layers of challenges for regional economies in the coming period or even escalate global tensions.