"Vladimir, stop!"
Trump rebukes Putin for deadly strikes on Kyiv
Hello from the Bear Market Brief.
This week in the news:
U.S. special envoy Steve Witkoff visited Moscow for his fourth round of talks with President Putin.
Russia expects revenues from oil and gas to decline by 15% this year, affecting spending and the federal budget.
More than 400 war participants applied to run for office in United Russia’s upcoming primaries.
Russia launched a massive missile attack on Ukraine, killing 12 people in Kyiv.
— Sara Ashbaugh, Editor in Chief
Trump’s “final offer”
The U.S. continued to push for a ceasefire this week, holding separate negotiations with Ukraine and Russia.
On Wednesday, U.S. Secretary of State Marco Rubio was scheduled to meet with the foreign ministers of Ukraine, France, Germany, and the UK in London. The ministers planned to discuss the U.S. peace proposal introduced during last week’s meeting in Paris. However, several days before the meeting, media outlets such as Axios and The Washington Post began reporting leaked details of the proposal. According to anonymous sources, the plan includes the U.S. recognizing Crimea as Russian territory and freezing the conflict along the current front lines, effectively ceding occupied territory to Russia. President Zelenskyy quickly rejected this idea, telling journalists, “Ukraine does not legally recognize the occupation of Crimea…There is nothing to talk about here. It is against our Constitution.” Shortly after Zelenskyy’s remarks, Rubio cancelled his trip to London, citing scheduling conflicts. The foreign ministers of Germany and France followed suit. Although the talks still took place, they were downgraded to the level of senior officials rather than foreign ministers. “The Ukraine Peace Talks meeting with foreign ministers today is being postponed. Official-level talks will continue but these are closed to media,” the UK Foreign Office said in a statement.
Afterwards, Trump blamed Zelenskyy for the breakdown of high-level talks. “Nobody is asking Zelenskyy to recognize Crimea as Russian Territory,” he wrote in a post on Truth Social, “It’s inflammatory statements like Zelenskyy’s that makes it so difficult to settle this War.” In recent days, Trump has repeatedly emphasized that he wants an end to the war soon, even threatening to walk away from peace negotiations entirely if a settlement can’t be reached. According to Axios, the peace plan is described as Trump’s “final offer.” In addition to the U.S. recognizing Russian control of Crimea and the occupied parts of the Luhansk, Donetsk, Kherson, and Zaporizhzhia oblasts, the proposal also includes a promise that Ukraine will not become a member of NATO and the removal of sanctions that have been on Russia since 2014, among other things. In exchange, Ukraine will receive “a robust security guarantee” enforced by its European allies, the implementation of the minerals deal that was postponed in February, and monetary assistance for reconstruction. However, Zelenskyy has said that Ukraine will not seriously consider any proposal until a ceasefire is implemented. “We are ready for dialogue in any format, with anyone in that format, at any time, but only after a real signal that Russia is ready to end the war. That signal is a complete unconditional ceasefire,” he said.
Meanwhile, U.S. special envoy Steve Witkoff visited Moscow on Friday for his fourth round of talks with President Putin. According to Kremlin aide Yuri Ushakov, the three-hour meeting between Witkoff and Putin was “constructive and very useful,” bringing the U.S. and Russia closer “not only on Ukraine, but also on a number of other international issues.” Ushakov also mentioned the possibility of resuming direct talks between Russia and Ukraine, which Putin had suggested earlier this week.
— Sara Ashbaugh
Zurab Tsereteli, a Georgian-Russian sculptor and President of the Russian Academy of Arts, died on Tuesday at the age of 91. Tsereteli was known for his enormous (and sometimes controversial) sculptures, including the bronze bust of President Putin pictured here. His large-scale works can be spotted all over the world, including a monument of Peter the Great that towers over central Moscow; “Good Defeats Evil,” a sculpture of St. George that sits outside the UN Headquarters in New York; and “Birth of a New Man,” a portrait of Christopher Columbus in Seville. Tsereteli was also known for his close relationships with Russia’s political elite, including former Moscow Mayor Yuri Luzhkov and Putin himself. (photo: Reuters)
Oil prices and the Russian budget
The revenues of the Russian federal budget from oil and gas sales are set to be 22% lower in April 2025 than a year before, according to Reuters. This follows a 17% year-on-year drop in March and a 10% drop for the first quarter. The prognosis for the whole year is a 15% drop from 2024.
The slump is partially a consequence of the recent strengthening of the ruble against the U.S. dollar—by more than 20% so far this year. This has already prompted a debate between the government and the Central Bank about an extension of the rule under which exporters need to sell a set percentage of their currency earnings on the market, the initial purpose of which was to strengthen the ruble. However, the government has also dropped its prediction of the average Brent oil price for 2025 from $81.70 to $68 per barrel. For Russia’s Urals blend, the Ministry for Economic Development expects an average price of $56 per barrel, even though the federal budget was planned with an expected average price of $69.70.
Finance Minister Anton Siluanov has proposed changing the budget rule that governs money transfers to and from the National Welfare Fund and revising spending. If the oil price is below a predetermined cutoff level, the government essentially buys rubles with the fund’s liquid assets to support budgetary spending. As of April 2025, the fund has 3.27 trillion rubles of liquid assets. If the government continues prior spending patterns and if the Urals price drops below $40 per barrel, these funds will be depleted within a year. The government can also count on increased tax receipts due to tax hikes adopted last year.
A scenario of a continuing trade war worsens the prospects both of replenishing the fund and of keeping to the spending plans outlined in the federal budget. As long as the war in Ukraine remains an utmost political priority, it is unlikely that the Kremlin would approve any cuts to military spending, and it is worth noting that the government usually releases large payments for state contracts in the first quarter. Sequestering expenditures under other headings, however, may still increase political risks domestically.
— Andras Toth-Czifra
Integrating war participants
One day before the closing of registration for the “primaries” of the governing United Russia party before the September regional and local elections, only 464 (of more than 21,000 potential candidates) former war participants entered the selection process. This is more or less in line with last year’s numbers, when the governing party ended up supporting 342 war participants, mostly in local elections (there is no guarantee that all the 464 people mentioned above will become official party candidates, however). This includes several people with prior experience in public administration.
The low number of war participants among the potential candidates of the governing party, which is expected to be the main vehicle for them to rise to public administration roles, is partly due to the fact that most mobilized and contract soldiers are still in Ukraine. However, the number is still remarkably low considering Vladimir Putin’s promise to treat war participants as a “new elite” and an updated list of key performance indicators for governors that obliges them to make sure that war participants find jobs and have access to social services.
Last year, in spite of United Russia officially adding a 25% bonus to the primary votes of war participants, opposition from established party elites in certain regions prevented a number of them from advancing (even though later dozens were appointed to various unelected positions in local and regional governments). Even some of those who did win seats “chose” to return to the front. Recent conflicts (e.g. in the Irkutsk Region) indicate that such situations are still developing.
Intra-elite conflicts are not the only reason why the Kremlin is showing concern about a large number of war participants returning to Russia in the event of a ceasefire. War participants—mostly relatively young men—will return to an economy with uncertain prospects that has been increasingly addicted to state spending, and the jobs that they are qualified for often pay a significantly lower salary than what contract soldiers receive in the army. The federal government tasked regions last year to set up training programs for returning war participants with the goal of finding jobs for them in public administration, state-owned organizations, or in businesses that the federal or regional authorities can control or influence. As of April 2025, nine out of ten regions have set up such programs.
— Andras Toth-Czifra
Emergency responders are working to clear rubble in Kyiv following a Russian attack that took place early Thursday morning. At least 12 buildings in the capital were damaged, including shops, schools, administrative buildings, and residences. The Svyatoshynskyi district was most affected, but missiles struck the Holosiivskyi, Solomyanskyi, and Shevchenkivskyi districts as well. This was the largest attack on the Ukrainian capital since July 2024, when a missile hit the Okhmatdet children’s hospital, killing 34 people. (photo: Genya Savilov / AFP / Scanpix / LETA)
Attack on Kyiv
Russia launched a massive missile attack on Ukraine early Thursday morning, including a strike on the capital city of Kyiv. Seven other regions were also hit: Zhytomyr, Dnipropetrovsk, Kharkiv, Poltava, Khmelnytsky, Sumy, and Zaporizhia. According to the Ukrainian Air Force, Russia launched 145 drones and 70 missiles in total, 112 of which were shot down by air defense. Ukrainian Minister of Internal Affairs Igor Klimenko reported that more than 40 fires broke out across the country as a result of the strikes. Kyiv was hit the hardest; 12 people died and 90 were injured in the strike—the deadliest attack on the city in over 9 months. Search and rescue operations are ongoing in the Sviatoshinsky district, where two residential buildings collapsed and voices were heard under the rubble.
The Russian Ministry of Defense released a statement on Thursday evening claiming that the targets of the strikes were “Ukrainian facilities involved in the aviation, missile and space, machine-building and armored vehicle industries, as well as sites producing rocket fuel and gunpowder.” “The goals of the strike were achieved. All objects were hit,” the Ministry said.
President Zelenskyy was visiting South Africa at the time, but canceled the rest of his trip after learning of the attack. He condemned the strikes in a post on X, writing, “It has been 44 days since Ukraine agreed to a full ceasefire and a halt to strikes. This was a proposal from the United States. And it has been 44 days of Russia continuing to kill our people and evading tough pressure and accountability for its actions.” President Trump also criticized the attack, posting about it on Truth Social. “I am not happy with the Russian strikes on KYIV. Not necessary, and very bad timing. Vladimir, STOP! 5000 soldiers a week are dying. Lets get the Peace Deal DONE!” he said.
— Sara Ashbaugh
On the podcast
The weeks after Donald Trump and Volodymyr Zelenskyy’s Oval Office clash have precipitated drastic shifts in transatlantic relations and the potential trajectory of Russia’s war in Ukraine. Now a possible ceasefire is on the horizon.
This week on the Bear Market Brief podcast, host Aaron Schwartzbaum and Maximilian Hess make sense of the Oval Office blow-up and discuss President Trump’s strategic aims, Russia’s goals, Europe’s response, the U.S.-Ukraine minerals deal, and what might come next with Russian sanctions.
Quickfire: Regions
The independent election monitoring network Golos suggested that Andrey Travnikov, the governor of the Novosibirsk Region, could be labeled a “foreign agent.” It emerged that Travnikov’s latest gubernatorial campaign in 2023 was partially financed by Qu Fei, a Chinese-born businessman whose company, Maslov, later received support from the governor for a rapeseed processing complex. Qu himself spoke about this at an ongoing trial in the case of Alexander Zyryanov, the head of the Novosibirsk Regional Development Corporation. The money appears to have been donated to the Novosibirsk Regional Cooperation and Development Fund, which, as a Russian entity, could legally donate to United Russia’s campaign fund. The case comes shortly after the managers of the Kursk Regional Development Corporation were arrested in connection with the faulty construction of the region’s defensive lines, highlighting the role of regional development corporations in channeling money to selected officials. While Qu is a naturalized Russian citizen (which may legally invalidate the accusation of foreign financing), the case also highlights the political activity of business groups with Chinese backgrounds at the level of regional politics.
A federal state of emergency was declared in the Transbaikal Territory due to rapidly-spreading wildfires, which now engulf more than 190,000 hectares (470,000 acres)—19 times the territory affected by wildfires in the region last year. According to the Ministry of Emergency Situations, several of the fires were man-made. Thus, regional authorities have prohibited movement between settlements without the express permission of local officials. As of late April, most active wildfires in Russia have been observed in the Far East; apart from the Transbaikal Territory, some districts of neighboring Buryatia are also affected. The situation at this point seems to be manageable. However, the high fire season has just started, and wildfires are starting in other regions amidst war-related staffing shortages at regional fire protection services.
The Ukrainian military claimed to have hit the final assembly line of a drone production facility in the Alabuga Special Economic Zone in Tatarstan on April 23, more than 650 miles from the border of Ukraine. While the Russian authorities did not acknowledge that the attack was successful, they did report Ukrainian drone activity in Tatarstan. The Alabuga factory is where Russia produces Iranian Shahed-type drones. Over the past week, there were also reports of a successful attack on an ammunition depot in the Vladimir Region. On April 25, General Yaroslav Moskalik, head of the main operational department in the General Staff of the Russian Armed Forces, was assassinated with a car bomb in Balashikha, near Moscow. The Ukrainian government has not commented on this latest development. However, earlier similar assassination attempts have been linked to the Ukrainian security services.
— Andras Toth-Czifra