Trust between the Ukraine and Russian delegation remains “at zero” during the Abu Dhabi meeting on January 24- February 4, Ukrainian President Volodymyr Zelenskiy said, reports Interfax. However, he went on to say concrete proposals were made to create a free trade zone in Donbas for the first time and the war may be over by summer.

Zelenskiy gave a series of interviews over the weekend where he debriefed the Ukraine’s press on the progress, and lack of it, made during the last round of peace talks with Russia. Major obstacles remain. Zelenskiy confirmed that during the negotiations in Abu Dhabi, it was not possible to resolve the question of the Armed Forces of Ukraine (AFU) quitting the Donbas and who will retain control of the Zaporizhzhia nuclear power plant (ZNPP).

Zelenskiy also reported that Ukraine’s intelligence services report that the US is in talks with the Russian side on a possible $12 trillion package of business deals should the war come to an end.

Zelenskiy noted that "complex issues remain complex," during conversations with local journalists on February 6. He reiterated his "We stand where we stand" policy of not giving up control of territory that the Armed Forces of Russia (AFR) does not control. “That is the fairest and most reliable model for a ceasefire today, in our opinion," Zelenskiy said.

However, Zelenskiy was cautiously upbeat on the Abu Dhabi meeting that ran from January 24 until February 4, the first trilateral Ukrainian-US-Russian talks since the war started. He told the local press there was a change in tone by the Russian side that were more willing to engage in pragmatic negotiations, rather than just lecturing the Ukrainian delegation on history as previously.

"There are changes in their rhetoric. But they have zero faith in them. I think they have about the same feelings for us as they did before, because they hate Ukraine, that's all. They came to us with a war. And this is not a war provoked by Ukraine. They came here and started killing Ukrainians. This is hatred. You remember how much bullying, torture, murder there was – just from the beginning of the war. Therefore, we have no illusions," Zelenskiy told reporters.

The meeting broke up, only agreeing to a new prisoner swap, but the Ukrainian President said the US side has proposed a new round of talks between Ukraine and Russia that is scheduled to take place in Miami in one week in a continuation of the trilateral format.

The US reportedly wants an end to the war by June. Previously, Zelenskiy said he thought the war could be over by summer, but after the Abu Dhabi meeting became more pessimistic, saying last week that he thought the war would continue until 2027. Now he appears to have become more optimistic that an end is closer.

The Ukrainian president reiterated that Kyiv will not accept any agreements negotiated solely between Moscow and Washington that affect his country. An agreement made "about us, without us" is unacceptable to Ukraine, he declared.

Russia turns the screws

As talks continue, Russian President Vladimir Putin is keeping the pressure up with a renewed intense barrage of missiles and drones on February 6 targeting Ukraine’s energy infrastructure as he attempts to freeze Ukraine into submission.

The main targets were the power grid, power plants, and ultra-high voltage 750kV substations that are the backbone of Ukraine’s power grid. Russia deployed more than 400 drones and approximately 40 missiles and cruise missiles in the attack after a brief pause was announced last weekend that ended on February 2. Centred on Kyiv, damage was also reported in the western Ukrainian regions of Volhynia, Ivano-Frankivsk, Lviv, and Rivne.

Zelenskiy called on allies to urgently “open their warehouses” and send more Patriot missile ammo, NASAMS and other air defence weapons to close the skies and protect Ukraine’s energy infrastructure as Ukraine is running low on air defence protections.

"It is important that everyone who supports the trilateral negotiations reacts to this. Moscow must be deprived of the opportunity to put pressure on Ukraine with the cold. This requires missiles for the Patriot, NASAMS and other systems. Each party helps us get through this winter. Thank you to all partners who understand this and really help," Zelenskiy said.

$12 trillion dollars of deals

There is a possibility that the US and Russia will sign documents on economic cooperation worth about $12 trillion, Zelenskiy said, Ukrinform reported, which he called the "Dmitriev package," referring to head of Russia’s sovereign wealth fund, Kirill Dmitriev who is a member of the Russian delegation and heading up business talks with the US side.

"There is a volume of about $12 trillion dollars. This is like a package of economic cooperation between America and Russia. That is, we are hearing about the likelihood of such or similar bilateral documents between America and Russia," the president said, referring to information he has received from Ukraine intelligence services.

The Trump administration has made it clear from the start that it is interested in doing business with Russia. The head of Russia’s sovereign wealth fund, Kirill Dmitriev said at the first meetings in Riyadh in February that he was pursuing a “parallel track” of business negotiations with his counterpart Steve Witkoff and those negotiations have been ongoing. Putin has been tempting Trump with access to Russia’s cornucopia of raw materials and as bne IntelliNews reported last week, has set up a Siberian rare earth mining project to tempt the White House amongst other offers discussed at the Alaska summit between the presidents on August 15.

As part of the 27-point peace plan (27PPP) thrashed out at the Moscow meeting on December 3, backed by the Kremlin, includes using part of Russia’s frozen $300bn of reserve assets to fund a $100bn US-Ukraine reconstruction fund.

FEZ

In the meantime, the American side again raised the issue of a free economic zone at the Abu Dhabi meeting that was for the first time discussed by the Russian side as a possibility, according to Zelenskiy.

"I want to remind you: in general, neither Ukraine nor Russia have ever been enthusiastic about the idea of ​​a free economic zone. Russia wants us to leave the Donetsk region, and we said that the most reliable position is "we stand where we stand." The American side offers such a compromise, in their opinion, option. And we note that the parties discussed this issue," the president noted.

Zelenskiy repeated his recent comments that the thorny issue of territorial control can only be settled at the level of the leaders of Ukraine, the United States, and Russia. He confirmed his readiness for such negotiations but no joint meeting between Trump, Putin and Zelenskiy is on the cards for now. A similar suggestion for such a presidential face-to-face meeting was made, and tentatively accepted, as part of the failed 2022 Istanbul peace deal to resolve territorial control questions.

"I think that's why they talked about a free economic area, which they didn't talk about before... Judging by what the team told me, they talked about this topic, how it could be. So, the Russians, in principle, are ready to discuss it. Previously, the Russians also didn't talk about a free economic area. Because they weren't ready. Now they've worked to receive information about a free economic area," Zelenskiy told reporters.

Zelenskiy added that he doesn’t know if the idea of a FEZ is workable, but the fact it is now on the table as a territorial compromise is a step forward. "Because when we talked about a free economic area, we had different views on it. So, we're talking about some kind of large area. Part of it that's now under Russian control is under Russian control. Part of the area that we're currently controlling, that is, the eastern part of Donbas, will be under our control," the president said.

"Even if we come to the creation of a free economic area we will need fair and reliable rules. I mean the same rules for both sides, the same proposals for both sides. We would very much like to ask for a fairer attitude. We see that the United States will be neutral. Therefore, when we talk about neutrality, we ask for the same balance for both sides. So this is our land. We do not recognize it as Russian even if it is a free economic area. Our land, if it is a free economic area, is our people, our flag, and it is our control. How to control it is up to us. We do not need to share what we will do there, if it is our control and our territory. That's all. This is fair and this is reliable," Zelenskiy added, reports Ukrainska Pravda.

At the same time, he said if the Ukrainian side takes "one step back to create such an area," the Russian side should do the same, repeating an earlier compromise that Bankova has suggested: any withdrawal from territory by the AFU should be matched by an equal pull back by the AFR. The Kremlin has rejected this idea and also intends to move its paramilitary police force, Rosgvardiya, into the region if the AFU leave.

ZNPP

Zelenskiy also admitted no progress was made on the issue of who controls Zaporizhzhia nuclear power plant (ZNPP). The Russians are insisting they will remain in control of the plant, the largest nuclear power station in Europe, but are offering to sell Ukraine cheap power.

The US team has suggested that the NPP be jointly controlled by Russia, Ukraine and the US. Bankova has said it is willing to split control between Ukraine and the US, but the US could sell cheap power to Russia if it chose, in a compromise. Separately, the Kremlin has said it wants to build a large datacentre based on the supplies of cheap power from the NPP. Zelenskiy said the issue of ZNPP should be discussed in conjunction with the reconstruction of the Kakhovka HPP, another of Ukraine’s four functioning NPPs.

"We have not yet found a common understanding regarding the Zaporizhzhia nuclear power plant. All parties realize that the issue of the plant must be resolved together with the issues of restoring the dam, water use, and the ecosystem of this territory in general," the head of state said.

Change of tone

Participants in the talks report following a change of the head of the delegation team from Ukrainian Secretary of the National Security and Defence Council Rustem Umerov to Kyrylo Budanov, Ukraine’s former HUR spy master and now the head of the presidential administration the tone of the talks has improved.

According to reports from the meeting, the Russian side has dropped its propensity to lecture the Ukraine team on history and now takes a much more pragmatic tone.

"The Russian delegation is no longer talking about these empty historical almanacs and excursions, it is now about something else and more concrete – what we are doing and what we are not doing; what we are ready for, what we are not ready for, how we will monitor the ceasefire and other such specific things," the president said.

Another thorny topic was broached: who and how any ceasefire will be monitored. The Europeans are pushing for a contingent of British and French peacekeepers to monitor the ceasefire – an idea they earlier ruled out as unworkable and one that the Kremlin has rejected out of hand. However, the idea has resurfaced and last week Nato General Secretary Mark Rutte described a three-stage system of escalation of European responses to any violation of a ceasefire by Russia that still assumes a US backstop in the last stage.

Zelenskiy said that it is difficult to comment on the agreements on the introduction of foreign military contingents into Ukraine. "It is difficult for me to say about the presence on the ground, because the negotiators do not have the authority today to say that certain troops will be present. But this does not mean that they will not be. The American side says that they can guarantee monitoring. They are talking about how to technically ensure such," Zelenskiy said.

The military delegates at the Abu Adibi talks discussed the technical aspects of how monitoring could be achieved, Zelenskiy said. "The military accepts the idea that the Americans should monitor if the Americans agree to it. The Americans know our position: we want foreigners, including Americans, to ensure that the silence and monitoring are real. The Americans are not ready to talk about other foreigners, because they are ready to talk about themselves, and they understand that they will be ready to support this," Zelenskiy said.

The talks seemed to have moved forward if a concrete discussion of monitoring is on the table. Two weeks ago, Zelenskiy said the war may end this summer, but following the close of the Abu Dhabi meeting he seemed more pessimistic and said the war would likely continue until 2027. However, he seems to have become more optimistic again and returned to talking about ending the war by this summer on February 7.

"Why by this summer? We understand that their internal issues in America have an impact and will probably become even more relevant for them. For the first time, the parties discussed that the most difficult issues can probably be brought to a trilateral meeting of leaders. Probably. But for this, some preparatory elements are needed. It is important that a discussion of such a format is present in the dialogue," Zelenskiy said, referring to the upcoming mid-term elections in the US, according to the We Ukraine news channel.

Asked about the risk of the US withdrawing from the negotiation process if the war is not ended, Zelenskiy replied: "To be honest, I have not received such a message from the negotiating team. Of course, it is desirable that the Americans do not leave. For us, it is desirable. I think that the Russians also need the Americans to stay today, in my opinion."

"As for the Americans, they will probably just have a different priority – Congress [elections]. And we understand with you that they will devote all their time to internal processes – elections, changing the mood in their society. Elections are definitely more important for them. Let's not be naive. And they say that they want to do everything by June. And they will do everything to end the war," he said, adding the US has confirmed its participation in monitoring the ceasefire.

Russia running out of money

Zelenskiy speculated there was an added impetus to the Russian willingness to negotiate as its financial problems are growing rapidly. Russia’s Ministry of Finance (MinFin) just reported that oil revenues have dropped by half in January year-on-year and that the income in January is not enough to cover outgoings. Like last year, this year’s budget deficit is likely to come in well over target.

"I think they need a pause. I think Putin is thinking about a pause," Zelenskiy said at a meeting with journalists.

Russia’s fiscal position is under increasing strain as energy revenues continue to plunge, with oil-related taxes falling by half year-on-year to RUB281.7bn ($3.7bn) in January, according to Bloomberg calculations based on Ministry of Finance data published on February 4. Total oil and gas revenues dropped to RUB393.3bn ($5.13bn) – the lowest monthly figure since July 2020.

The decline was due to both falling oil prices and shrinking demand, particularly from India, which has cut back on Russian oil imports under pressure from the Trump administration. The average price of the Urals blend oil was just $39.18 per barrel in December, down 38% from a year earlier and significantly below the government’s budget assumption of $59 for 2026.

A source close to the Russian government told Reuters the worsening outlook could push the federal deficit to as much as 4.4% of GDP by the end of 2026—almost triple the official target of 1.6%. The same source noted that energy revenues could fall 18% below budget forecasts while spending may exceed plan by as much as 8.4%.

Overall, budget revenues are expected to drop 6% from planned levels to RUB37.9tn ($494.78bn) in 2026, the source said. “The budget situation is sharply deteriorating. Revenues will be lower and expenditures higher,” they added.

Russia has RUB4.1tn in fiscal reserves – enough to cover even the increased deficit – but analysts at Alfa Investment estimate that 73% of this buffer could be consumed in 2026 alone if low oil prices and current exchange rates persist. VTB, the country’s second-largest bank, forecasts reserve drawdowns of RUB2.5tn this year, which would leave just RUB1.6tn in liquid reserves by the end of the period – not enough to cover a second year of deficits if the situation does not improve.

According to the Ukrainian president, citing intelligence data, the real Russian budget deficit in 2025 amounted to over $100bn, compared to the officially recognized over $80bn, and this year it will be even greater.

The falling revenue will impact Russia's ability to replenish dead and wounded as the voluntary recruitment campaign depends on huge payments that are becoming increasingly unaffordable. Up to a third of Russian military spending goes on wages.

Zelenskiy said the number of signed contracts in Russia is not decreasing, but payments to the military are decreasing. So, the level of replenishment of the Russian army is 40,000 people per month, not all of whom go to the frontline, and the Ukrainian military destroys 30,000 to 35,000 occupiers every month in killed and seriously wounded, and this number of Russian losses will grow.

"They are losing primarily those who are on the frontline. That is, if this continues, they will lose 100,000 to 120,000 of those who are on the frontline in a few months. And they will not fill this deficit taking into account the shortage of money... What solutions? Mobilization," the President of Ukraine said. Putin has been very careful to avoid a general mobilisation and has so far worked hard to keep the general population insulated from any direct effects of the war. There was a limited partial mobilisation in September 2022, but a general mobilisation is seen as politically dangerous to the Putin regime.

"If Putin announces a large mobilization, we understand what impact it will have on their society and on him personally. I do not believe that he will stop the war in the near future," Zelenskiy added, and at the same time reported that Ukrainian intelligence says that Putin has no immediate plans for a mobilization.

Commander-in-Chief of the Armed Forces of Ukraine Oleksandr Syrsky told reporters last week that over the past six months, the number of Russian troops in Ukraine has remained approximately at the same level – 711,000 to 712,000 people, including the operational reserve.

Presidential elections law

In another sign that peace may be approaching, Ukraine’s Rada voted through a law on February 6 that allows for presidential elections to be held during wartime, despite a constitutional ban on holding a vote while the country is under martial law.

Holding elections within 60 days of a ceasefire was one of the point on the original US-sponsored 28-point peace plan (28PPP) that kicked the peace talk process off in November. Zelenskiy has been trailing in the polls recently and is currently in third place behind former commander-in-chief General Valerii Zaluzhnyi and his new head of staff Kyrylo Budanov. Putin has on several occasions questioned Zelenskiy legitimacy after his presidential term officially expired last May. And Trump’s relations with Zelenskiy is poor.

The law, adopted by a majority in the Verkhovna Rada, creates a legal framework for organising a presidential election despite the ongoing conflict with Russia.

Trump has publicly criticised Kyiv for failing to hold elections since the war began, arguing that Ukrainians should be given the opportunity to vote despite the conflict. Bankova has countered the difficulties of allowing soldiers on the frontline vote are insurmountable.

Supporters of the legislation argue that the law is necessary to safeguard Ukraine’s democratic credentials and to provide a legal pathway should security conditions improve sufficiently to allow a vote. The new law will not automatically trigger elections but meets another demand in the 28PPP list.

The government has insisted that any election would still depend on practical conditions, including security guarantees and the ability to ensure broad participation. Zelenskiy has previously said Ukraine would only proceed with a vote if international partners helped guarantee safety for candidates and voters as well as pay for them. Leader of the Servant of the People party and First Deputy Chairman of the Verkhovna Rada, Oleksandr Korniyenko, last week estimated the cost of holding elections at UAH 6bn ($160mn)