Ukrainian President, Volodymyr Zelensky.

By announcing the development of its own Ukraine peace plan, Europe has started to define a role for itself in the war. It must now go further by giving Zelensky a way out of the dilemma in which last week’s clumsy shakedown in the Oval Office has placed him.

Putin’s military violation of Ukrainian sovereignty is only partially accomplished. There is no evidence that he has abandoned his goal of complete control over Ukraine. Yet, in return for an illusion of protection against Putin, Trump threatens to violate Ukraine’s economic sovereignty. And if Zelensky stands up to both he risks losing everything.

Trump’s immediate goal is to impose a ceasefire at any cost. Putin is offering no concessions. There would be no restitution of occupied lands; no return of kidnapped children; no credible security guarantees; and no serious capacity for Ukraine to defend itself against renewed Russian aggression. This would be an unjust peace. It could not last. Putin would regroup and go again when he is ready.

Zelensky could never agree to such a capitulation. That’s why he rightly stood his ground in the Oval Office. He will persist, even if Trump does not restore US support.

But Trump also covets Ukraine’s minerals. He is trying to take control of these resources and acquire a punitive share of any revenues they might generate. He insists that a US business presence at an unspecified future time would by itself deter further Russian aggression (albeit that few civilian businesses deliberately put their employees in harm’s way, still less ask them to act as informal peacekeepers).

Zelensky must be reluctant to agree to that either. It is not clear if he has managed to defer the threat for now. The agreement he was to sign in Washington left for further negotiation the critical questions about control and share of revenues. But Trump may now demand more in return for restoring the flow of US arms and intelligence.

Trump has said that Putin holds all the cards. Zelensky urgently needs a new card to play. His European allies can give him one.

European banks hold almost US$300bn in frozen Russian assets. They are already extending loans to Ukraine backed by the interest from these assets. But they have so far drawn back from mobilising the capital itself. It is now time for them to do just that.

A bad idea, apparently now being considered by European leaders, would be to threaten to seize the assets if Putin breaches a ceasefire. Zelensky needs money today, not tomorrow. Stronger defences make the strongest deterrent.

Momentum is also building for the assets to be seized immediately. There is a case for that, and it is of course no less than Putin deserves. But given the outcome required it would not be the most effective use of these funds. It would be an unnecessary surrender of moral high ground, which Putin would exploit. And Zelensky will still need US weapons. Trump’s strange desire to stay on the right side of Putin may make him more likely to block their purchase with “stolen” money. 

It would be more astute to lend the assets to Ukraine, against a commitment that once a durable peace is established Ukraine would pay them back to Russia much as Britain paid back loans to the US after the Second World War. The funds would be used to procure a sustained supply of arms and materiel; to enhance Ukraine’s capacity to arm itself; and to underpin economic recovery.

Supported by this modern version of lend-lease, Zelensky would be better placed to withstand the loss of US support. The risk of military collapse would recede, and he could strike a better minerals deal with Trump. He would still have to make concessions in a peace process, but Putin would now be under pressure to do so as well.

Putin is already in a weaker position than Trump suggests. Inflation is running at more than 20 per cent, military spending is eating up more than 6 per cent of GDP, financial reserves are depleted. The Russian economy cannot cope indefinitely with these stresses. Time is not on his side, and if Zelensky acquired a new war chest, the pressure on Putin to offer concessions would substantially increase. And having paid for his war by plundering Russia’s reserves, the possibility that the frozen assets might eventually be paid back would give him an added incentive.

Europe needs to show with decisive action that it is equal to an historic challenge. It must remove the danger of a Ukrainian military collapse and redirect the pressure of time from Zelensky onto Putin. A lend-lease loan of the frozen assets is the best and perhaps the only way to solve these problems and open a path to a just and durable peace.

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Is Trump’s ‘Minerals Deal’ a Fossil Fuel Shakedown?

It has been one week since a calamitous Oval Office meeting between President Donald Trump and President Volodymyr Zelensky of Ukraine ignited one of the most tumultuous periods in U.S.-Ukrainian relations since the 2022 Russian invasion. Overnight, Russia conducted one of its largest ever missile and drone strikes against Ukraine on March 6, targeting energy infrastructure. Senior U.S. and Ukrainian officials now plan to meet in Saudi Arabia next week.

Trump has made the signing of a so-called “Minerals Agreement” between the United States and Ukraine a precondition for subsequent efforts to end Russia’s war. But the agreement, described by one expert as “extortion,” goes well beyond minerals.

The deal would cut open Ukraine’s natural resource veins, and could leave the majority of its key resources — including fossil fuels — under Russian control. Fifty percent of Ukraine’s future earnings from its remaining natural resource wealth would go into a new fund under U.S. direction into which the United States would contribute nothing. The deal could benefit American and other Western companies but would provide few economic and no security guarantees to Ukraine.

It’s a steep price to pay for peace, but Ukraine may be forced to accept the deal given how closely aligned the Trump regime has become with Russian President Vladimir Putin. Trump is also laying the groundwork for the full reentry of Russia into the global economy, opening the door to a return of U.S. fossil fuel giants into one of the largest pools of oil and gas in the world.

Svitlana Romanko remembers the exact moment that Russia’s invasion of Ukraine began. At 5:00 a.m. on February 24, 2022, the bombs started to fall. She saw the first explosion and ran out onto her balcony in Ivano-Frankivsk, Ukraine. As she stood there watching the devastation unfold, she knew she had little time to react. An environmental lawyer and leading international climate campaigner, Romanko already knew what needed to be done.. She reached out to friends; many of whom were also watching the bombs explode above their heads.

“Everyone felt this, they knew, that if we want to stop Russia, we must get rid of fossil fuels,” Romanko tells me, the sense of urgency and purpose from that moment still clear in her voice three years later almost to the day when I reach her by phone in Ukraine. “We started organizing together to make a public call which was to end the global fossil fuel addiction that feeds Putin’s war machine.”

The call was quickly echoed and acted upon by government leaders and advocates throughout the world. Within a week, President Joe Biden announced a U.S. ban on imports of all Russian fossil fuels and stressed the urgency of a U.S. transition to clean energy. “That’ll mean tyrants like Putin won’t be able to use fossil fuels as weapons against other nations,” Biden said. It was the first step in an extensive global sanctions regime across governments. “We are determined to limit Putin’s capacity to finance his atrocious war,” wrote Ursula von der Leyen, president of the European Commission, adding, the European Union “must get rid of its dependency on fossil fuels.”

Trump has set the U.S. on a radically different path, seeking to isolate Ukraine while working to end what he has called “the war on fossil fuels.”

Oval Office Shakedown

Trump’s cringe-inducing shakedown of Zelensky in the Oval Office on February 28 was the kind of made-for-TV spectacle for which Trump lives. The entire meeting had the markings of a set-up, designed to denigrate and weaken Zelensky and embolden Putin.

Zelensky had ostensibly been brought to Washington to sign what has been dubbed “the Minerals Agreement,” though the actual title is the “Bilateral Agreement Establishing Terms and Conditions for a Reconstruction Investment Fund.” A draft of the agreement was published by the Kyiv Independent newspaper on February 26. The fund is to be financed with future revenues from Ukraine’s state-owned natural resources and infrastructure, including oil, gas, coal, and minerals. After a press conference in the Oval Office, the two leaders were supposed to oversee the signing of the agreement, which Trump calls “a peace deal.” No deal was signed.

In the weeks leading up to the meeting, it seemed that Trump and members of his administration were methodically checking off a Putin wish list for ending the war. Trump went so far as to assert that Ukraine may or may not become a part of Russia “someday.” Secretary of State Marco Rubio held a meeting with Russia in Saudi Arabia to negotiate a peace deal; Ukraine was not invited. Attorney General Pam Bondi disbanded a task force aimed at seizing Russian oligarchs’ assets and ordered a halt to efforts to combat secret foreign influence campaigns in U.S. politics.

The U.S. had negotiated drafts of the “Minerals Agreement” to meet some of the terms requested by Ukraine, but it still failed to include Zelensky’s primary demand: a security guarantee from the U.S. to protect against future Russian aggression. From the outset of the Oval Office meeting, Trump brushed aside such requests, making clear that a security deal was off the table. “You don’t have the cards,” he said to Zelensky, “You are either going to make a deal, or we’re out.”

Following the meeting, the White House plowed ahead with its Putin wish list, announcing a pause in U.S. military aid to Ukraine, a halt on sharing military intelligence with Ukraine, and the initiation of steps to lift U.S. sanctions against Russia. Members of the administration are also reportedly backing negotiations with Russia to restart the Nord Stream 2 pipeline — the crown jewel of Russian energy.

The “Minerals Agreement”

Since the 2022 Russian invasion, Zelensky has tried to attract U.S. and other foreign investors to Ukraine in exchange for military and other financial commitments. He (remotely) rang the opening bell at the New York Stock Exchange in 2022, as part of an “Advantage Ukraine” campaign highlighting 10 different sectors open for investment, including natural resources. The campaign cites “abundant reserves of coal, iron ore, natural gas, manganese, salt, oil, graphite, sulfur, kaolin, titanium, nickel, magnesium, and mercury,” as well as agriculture, STEM, pharmaceuticals, and woodworking.

“This agreement was initially Zelensky’s idea,” says Maria Popova, an Associate Professor of Political Science at McGill University and author of Russia and Ukraine: Entangled Histories, Diverging States, explaining that he thought that it would give Trump “a reason to have a stake in Ukraine sovereignty and an interest in keeping Ukraine independent from Russia and holding Russia at bay.”

With support from the global community, Ukraine has made significant renewable energy progress in recent years to reduce dependency on fossil fuels and enhance energy security, adopting a National Energy and Climate Plan and National Renewable Energy Action Plan in 2024. Part of this plan is the development of its critical minerals used in the production of renewable energy technology, including batteries for energy storage and solar panels.

Today, Ukraine produces critical minerals such as titanium (used in construction, airplanes, and other things) and is one of the world’s leading producers of graphite (used in steel manufacturing and electric motors). It has large potential reserves of lithium (used in batteries, including electric vehicles), uranium (used in nuclear power plants and nuclear weapons), and may have substantial reserves of “rare earth minerals” — a group of more than a dozen metals used in many high-tech sectors, including in solar panels and electronics. There is, however, very limited data on these elements in Ukraine and it has not produced any to date.

Ukraine also has a century-long history of extensive fossil fuel operations, as it possesses substantial reserves of oil, gas, and coal. Prior to the 2022 invasion, Ukraine transited more gas than any other nation in the world, via an expansive pipeline network from Russia. After Russia, it has Europe’s largest gas storage capacity.

In 2012, under the Moscow-friendly President Viktor Yanukovych, ExxonMobil and Royal Dutch Shell planned to develop Ukraine’s deepwater offshore gas fields in the Black Sea. The following year, Chevron and Shell signed contracts valued at $10 billion a piece to develop Ukraine’s onshore gas fracking fields. After Yanukovych’s ouster, Chevron exited Ukraine, reportedly motivated by a new administration’s “unfriendly tax environment.”

In 2014, Russia annexed Crimea, much of the rest of Ukraine’s Black Sea coast, and much of Ukraine’s industrial heartland in the eastern Donbas region — areas that also correspond with the bulk of Ukraine’s fossil fuels, ports, and many other natural resource deposits. Exxon and Shell soon exited Ukraine, too. With Russia’s 2022 invasion, Putin captured even more vital natural resources, including a large swath of Ukraine’s rare earth deposits.

The U.S.-Ukraine “Minerals Agreement” may have begun with a focus on rare earth minerals, but that is not where it ended. It covers all of Ukraine’s natural resources and related infrastructure, and requires that half of all of Ukraine’s revenues from the “future monetization” of these resources be put into a Reconstruction Investment Fund jointly managed by the U.S. and Ukraine. The U.S. has made no financial obligation to the fund, which Trump views as “payback” for money the U.S. has already spent on Ukraine.

The U.S. could end up exercising a great deal of sway over the fund. The U.S. government holds “the maximum percentage of ownership of the fund’s equity and financial interests,” and “the decision-making authority” of the U.S. government “will be to the extent permissible under applicable United States laws” — though it’s not clear what level of control that means. The fund will also reinvest an undetermined percentage of its revenues in Ukraine to attract further investment.

Under the agreement, Ukraine’s natural resource assets are expansively defined as “deposits of minerals, hydrocarbons, oil, natural gas, and other extractable materials, and other infrastructure relevant to natural resource assets (such as liquified natural gas terminals and port infrastructure). For the avoidance of doubt, such future sources of revenues do not include the current sources of revenues which are already part of the general budget revenues of Ukraine.” This final clarification is likely intended to protect Ukraine’s existing natural resource operations from the fund.

The description of the purpose of the fund is even broader in its scope. The fund is described as supporting “investments to increase the development, processing and monetization of all public and private Ukrainian assets including, but not limited to, deposits of minerals, hydrocarbons, oil, natural gas, and other extractable materials, infrastructure, ports, and state-owned enterprises as may be further described in the fund agreement.” The governments intend “that the investment process will lead to opportunities for distribution of additional funds and greater reinvestment, to ensure the sufficient supply of capital for the reconstruction of Ukraine as set out in the fund agreement.”

There is no U.S. security guarantee. Instead, it says the U.S. government “supports Ukraine’s efforts to obtain security guarantees needed to establish lasting peace.” Detailed terms will be worked out by representatives of the two governments as part of the fund agreement, which will require ratification by the Ukrainian Parliament.

Reconstruction money is traditionally provided as a grant or a loan. There has never been an agreement like this before, potentially ceding unprecedented control over Ukraine’s economy and vital natural resources to the Trump administration and by proxy to Putin. While a great deal about the agreement remains unclear, there’s enough for Samantha Gross, Director of the Energy Security and Climate Initiative at the Brookings Institution, to describe the agreement as “extortionist.”

“We are taking from the Ukrainians without intending to give them anything back,” she says, shock filling her voice. “If we’re not willing to give them a security guarantee, it just seems crazy,” Gross tells me. “If we want to invest in Ukraine, then we ought to do this contract by contract, like you would normally when you invest in a country.”

Popova, of McGill University. says that Zelensky “probably didn’t expect the situation that we have right now, which is that it seems that the Trump administration thinks that they can have their cake and eat it too — they can restore and reset friendly relationships with Russia and at the same time take advantage of investing in Ukraine.”

“If the U.S. holds majority control or key decision-making power, it could effectively dictate Ukraine’s resource policies,” warns Romanko, the Ukrainian environmental lawyer. She shares a long detailed list of concerns with the agreement prepared by Razom We Stand, an organization of which she is the founder and director.

Romanko is eager for Ukraine to begin critical raw minerals development as part of an effort to build a renewable energy economy, but only if it does so sustainably, ethically, fossil-free, and in a way that ensures local benefit, she explains. Otherwise, Ukraine risks becoming “a raw material colony for the West.” Yet the agreement contains no such provisions, including no environmental or other protections. It fails to mention renewable energy development, and instead doubles down on fossil fuels, threatening hard-fought victories.

“Ukraine’s future should be built on fair trade, environmental protection, and a just transition [from fossil fuels] for workers and communities — not the neocolonial plundering of our natural resources,” Romanko writes.

There are other problems with the agreement. A great deal of Ukraine’s natural resources, including fossil fuels and minerals, are in territory controlled and occupied by Russia. The Trump administration has indicated that Ukraine should not expect to get all of its land back (if any) and Russia continues to explicitly reject making any concessions in future peace negotiations or accepting any U.S., European, or Ukrainian peace proposals. At the Oval Office press conference, CNN reporter Kaitlan Collins asked Trump if he would direct Putin to withdraw his forces from these resource areas. Zelensky interjected, saying, “Very good question, thank you so much.”

Trump hedged, saying, “I’ll study that, I’ll see.” Collins pressed on, asking who would protect the American assets — “Ukrainian, European, or U.S. forces?” — particularly if “Russia tries to invade or there is Russian aggression in those spots?” Trump replied that the “agreement will protect them,” adding, “that’s not going to happen and if that were going to happen, I wouldn’t make a deal.” Then he promptly turned his ire from Zelensky to Collins, saying, instead of “asking me these ridiculous questions, focus on surviving, because CNN’s got such low ratings I don’t think they’re going to survive.”

The vagueness of the agreement leaves a number of critical looming questions. The deal protects Ukraine’s “current sources of revenues” and operations that “are already part of the general budget revenues of Ukraine.” But what happens when Ukraine seeks to restart natural resource assets or infrastructure idled during the war or sign new contracts? Would the U.S have a hand in these negotiations, and would their profits go into the Reconstruction Investment Fund? This could open the door to the U.S. and even Russia not only exercising decision-making and profiting off Ukraine’s future natural resource development, but also some of its most valuable existing assets — from gas pipelines to refineries.

Romanko believes that such an outcome is not only possible, but intentional: “I have no doubt that a hidden agenda is getting access and decision-making rights to gas and oil pipelines, especially gas that’s so critical given that the European market is so important for Russia and has always been.” This is “really threatening to everything we’ve done so far” to weaken Russia’s war-fighting ability and influence, including “getting the full ban on Russian oil and gas to the European Union,” she adds.

Gross is more skeptical about the potential reach of agreement, but warns, “I think the thing Putin wants out of this deal is he either wants to own Ukraine or he wants it absolutely neutered.”

Pipelines Run Through It

Fossil fuels are the lifeblood of the Russian economy and the basis of Putin’s power. They have long dominated Russian-Ukrainian relations.

Putin’s first goal in Ukraine is to “eliminate our nation, our culture, our state, and our territorial integrity,” Romanko tells me. Putin is not planning on stopping with Ukraine, but only when he’s restored “his Great Russia from one ocean to the other ocean,” she emphasizes.

His second goal in Ukraine is to secure the free flow of Russia’s fossil fuels. The goals are interwoven. Russia needs “enough fossil fuel money to pay for a military buildup and invading ambitions,” to maintain Putin’s hold on power, and to deny the power of fossil fuels to Ukraine (or better yet, to control them), she explains.

Before the 2022 Russian invasion, Ukraine maintained the key role in delivering Russian gas to European markets via pipelines dating back to the Soviet era. In 2020, the EU received about 40 percent of its natural gas imports from Russia. The government of Ukraine owns the pipelines, and Russia pays Ukraine transit fees, which have been a substantial source of revenue and conflict. Russia has routinely reduced the fee it pays Ukraine and cut gas supply with devastating impacts on Ukraine and nations across Europe.

On January 1, 2025, the contract between Russia and Ukraine for the pipeline expired. Ukraine now faces a loss of some $800 million in annual transit fees from Russia, while the Russian company, Gazprom, will lose close to $5 billion in gas sales, according to Reuters. If the countries negotiate a new contract for this crucial pipeline, there is concern that it could potentially fall under the terms of the U.S.-Ukraine Minerals Agreement.

Nord Stream 2 — It’s Alive!

Russia has sought for decades to either wrest greater control of its pipelines through Ukraine, or bypass Ukraine through the construction of several alternative gas pipelines, the most significant of which is Nord Stream 2. The long-stalled project may now be revived as part of Trump’s economic negotiations with Russia to end the war in Ukraine.

In 2015, the Russian state-owned oil and gas company Gazprom partnered with Shell and other companies to build the Nord Stream 2 gas pipeline from Russia under the Baltic Sea to Germany. It has enough capacity to cut Ukraine almost entirely out of Russia’s gas exports. The pipeline quickly became one of the most contentious energy projects in history playing out against the backdrop of Russia’s buildup to the 2022 invasion of Ukraine, with Russia ultimately wielding fossil fuels as a weapon.

Construction of the pipeline was completed in September 2021, but amid global pressure to constrain Russian aggression in Ukraine and the fierce global backlash against the pipeline, German regulators did not issue the final permit. Russia retaliated, restricting gas supplies to Europe by 25 percent in October and December, in order to force Germany’s hand. Germany did not relent.

On February 24, 2022, Russia invaded Ukraine. In March through June 2022, Russia cut gas supplies to five EU member states, and in Mid-June, it cut gas supplies to Europe by 60 percent. In September 2022, in an act of sabotage, three underwater explosions hit Nord Stream 2 and its parent pipeline, Nord Stream 1, leaving only one of the four gas links in the network intact to this day.

Across the world, countries sought to reduce reliance on fossil fuels and increase renewable energy. “The biggest legacy of the global energy crisis triggered by Russia’s invasion of Ukraine may be that it accelerates the end of the fossil fuel era,” the International Energy Agency optimistically remarked last year, citing among other policies implemented across the world, President Biden’s Inflation Reduction Act.

Trump and Putin have a very different agenda.

Prominent Trump administration figures are aware of an initiative led by a close friend of Putin to bring in U.S. investors to revive Nord Stream 2, “a once unthinkable move that shows the breadth of Donald Trump’s rapprochement with Moscow,” reports the Financial Times. They view the effort “as part of the push to rebuild relations with Moscow and broker an end to the war in Ukraine.” The German tabloid Bild reports that Trump’s special envoy Richard Grenell made multiple unofficial visits to the headquarters of Nord Stream 2 AG (the pipeline’s Swiss-based parent company) as part of the effort. (Grenell denies this.)

According to the Financial Times, a U.S.-led consortium of investors has drawn up the outlines of a post-sanctions deal with Gazprom. Nord Stream 2 AG received a stay on bankruptcy proceedings in January, and the Danish Energy Agency granted a permit to Nord Stream 2 AG to carry out work to preserve the damaged pipeline. Some of Trump’s team now reportedly see the pipeline “as a strategic asset that can be leveraged in the Ukraine peace talks.”

Opening Russia Sanctions — All Hail Fossil Fuels

On February 18, the U.S., Russia and Saudi Arabia held a meeting about the future of the war in Ukraine without Ukraine. Maybe that should have been enough of a clue about what this whole mess is really all about.

Combined, these three nations alone produce nearly half of the world’s daily supply of oil, and the U.S. and Russia produce 35 percent of its methane gas. Saudi Arabia has the world’s second largest reserves of oil, while Russia has the largest gas reserves. There is very little that could undercut the individual power and influence of Putin and Saudi Arabia’s Mohammed bin Salman more than a world turned aggressively against fossil fuels.

Trump has built up close ties to Saudi Arabia and Russia both in and out of office, bringing the United States firmly into an alliance with the world’s most dominant fossil fuel autocracies. He’s implemented a radical agenda to bolster U.S. commitments to fossil fuels and undermine the global commitment to the green energy transition.

Following Trump’s conversation with Putin on February 12, Secretary Rubio and Russian Foreign Minister Sergei Lavrov laid the groundwork for “historic economic and investment opportunities” resulting from “the end to the conflict in Ukraine,” according to the State Department. Ahead of the talks, Russian Direct Investment Fund chief Kirill Dmitriev told reporters that the return of oil companies to Russia is inevitable.

On March 3, the White House directed the State and Treasury departments to draft a list of sanctions that could be eased for U.S. officials to discuss with Russian representatives, according to Reuters.

As a result of sanctions and the aggressive efforts by many nations to reduce demand for fossil fuels, particularly from Russia, Russia’s total revenue from all fossil fuel exports in 2024 were about half of those from 2022. Russia still produces and exports large amounts of fossil fuels — shifting much of its market to China and India — but is receiving far less money in return. With 40 percent of Russia’s federal budget from oil and gas prior to the war, the toll on the economy has been significant.

Public opinion, combined with sanctions, largely shut U.S. and other Western oil companies out of Russia and its vast oil and gas reserves. One boon of the rapprochement between the U.S. and Russia will be to Big Oil’s bottom line. ExxonMobil may be the largest beneficiary from reentry into Russia, and the company most in need of a return. It retains some of its largest Russian assets today. The company was forced to abandon its stake in the Russian Arctic offshore Sakhalin-1 project after sanctions hit, yet Moscow has twice extended the deadline for the sale, now pushing it to 2026.

Rex Tillerson, the CEO of ExxonMobil and later Secretary of State in Trump’s first administration, carefully built up a close relationship with Putin, ultimately establishing 10 joint ventures between Exxon and Russia’s state-controlled oil company, Rosneft, by 2013. In 2014, “Russia was going to be Exxon’s next mega-area. And the list of mega-areas in the world is very short,” reported the Financial Times. As a result of these deals, Exxon Mobil’s 63.7 million-acre Russian holdings were nearly five times larger than its second-largest holdings — its 14 million acres in the United States. With the imposition of sanctions in 2014, Exxon was largely shut out of these operations, and then fully shut out as result of the 2022 invasion.

Romanko is eager for peace in Ukraine, and she knows there will be costs. But she says, “when fossil fuels — not just metaphorically, but literally — try to eliminate you from the planet, not just by climate destruction, but a very brutal and violent torturing way, people know that we must get rid of fossil fuels.”

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