Bloomberg: Moscow prepares for new escalation of war after talks collapse

Russia is preparing to escalate attacks on Ukraine after concluding that negotiations for a peace agreement have reached a dead end, according to three sources close to the Kremlin.

Currently, Russia is considering the possibility of intensifying powerful conventional ballistic missile strikes on Kyiv, including the center of the capital, as well as on infrastructure facilities in other Ukrainian cities. This was reported by sources who asked not to be named due to the sensitivity of the issue. According to them, the negotiation framework is effectively completely destroyed, bringing both sides back to the starting point.

According to the sources, President Vladimir Putin will not end the war under economic pressure from sanctions and Ukrainian attacks on Russian oil refineries and logistics networks. Moscow is increasingly viewing Ukrainian strikes as attacks by NATO states, as alliance members supply Kyiv with weapons and intelligence. In their assessment, the current phase of hostilities is not yet the peak of military escalation.

Vladimir Putin signaled his intentions over the weekend in comments to a state television channel, dismissing the impact of Ukrainian attacks on the Russian economy. “Ukraine has opened this Pandora’s box, — he said. — Well, be prepared to receive a blow in response to your most sensitive sectors of the economy.”

Diplomatic efforts and their failure

Efforts by the United States to end the war have not led to a breakthrough, and negotiations have reached a dead end as President Donald Trump focused on the conflict with Iran. The Kremlin also refused to rely on what it believed was an agreement reached between Putin and Trump at their summit in Alaska last August. This agreement would have involved pressure from the United States on Ukraine to cede its eastern Donetsk region to Russia as part of a deal to end the war.

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Ukraine has consistently rejected Putin’s demand to hand over a belt of fortress cities in the Donetsk region, which Russian troops have failed to capture in battles since 2014. U.S. Secretary of State Marco Rubio clearly stated in June that Washington does not share Russia’s position, noting: “If there were an agreement, we would put an end to the war.” After negotiations with Russian Foreign Minister Sergei Lavrov in the Philippines in July, Rubio stated that “new concepts” were needed.

Director of the CIA John Ratcliffe made a rare visit to Moscow on Tuesday for talks with Russian counterparts, although it is unknown what exactly they focused on. Envoys Steve Witkoff and Jared Kushner from the United States were expected to travel to Moscow after an eight-month break and visit Kyiv for the first time, but dates for these trips have not yet been announced.

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Mutual strikes and the risk of escalation

In the absence of diplomacy, Moscow sees few alternatives to further escalation to achieve its military goals, according to four sources close to the Kremlin. Although Russia hopes that Kushner and Witkoff will come to Moscow with new proposals, expectations of a breakthrough are very low. The Kremlin believes that it has already made concessions during the war, and each of them has weakened Russia’s position, according to two sources. They viewed the meeting in Anchorage as another failed compromise.

Russia and Ukraine have intensified air attacks on each other’s territories in recent months. Ukraine has struck oil refineries, leading to widespread fuel shortages in Russia, as well as warehouses of e-commerce giants Wildberries and Ozon, causing billions of dollars in damage to logistics networks. Russian missile strikes on Ukraine have revealed a chronic shortage of air defense interceptors, leaving Kyiv vulnerable to attacks on energy and heating infrastructure, which plunged millions of people into cold and darkness last winter.

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Russia and Ukraine are also attacking each other’s commercial vessels and ports in the Black Sea region, raising concerns about the impact on grain supplies to global markets. These two countries account for more than a quarter of the world’s wheat exports, and the attacks are occurring during this year’s harvest.

The escalation of strikes is leading more and more Russian officials to conclude that Putin may ultimately decide to use tactical nuclear weapons as a last resort in Ukraine, according to sources close to the Kremlin. The risk that Putin will break the global taboo on the use of nuclear weapons in wartime, which has been in place since the United States dropped two atomic bombs on Japan in 1945, has long been a major concern of Western officials. Recently, there has been more talk in Moscow among “hawks” advocating such a move. An extreme response is being considered as possible, as for Putin, the only outcome worse than continuing the war would be its defeat.

Source: Bloomberg