The Uncomfortable Economics of Making Peace in Ukraine
When corporations become diplomats, whose interests are really being served?
Grüezi, or as they say in Austria, Griaß Gott!
Two bits of housekeeping:
I hate to shill for my paid newsletter – One Big Thing – but if you’d been reading last week, then yesterday’s Reuters and Wall Street Journal scoops might not have come as such a surprise.
7thin.gs is going to be cycling down the Danube from Passau’s Prince-Bishops, past Mauthausen, through the Grüner Veltliner vineyards of Wachau, and to Dürnstein’s ruined castle, where English crusader king Richard the Lionheart was held hostage. All of Europe’s history, horror and beauty. It’ll probably rain, but I can’t write and pedal so apologies for missing the next ten days.
When the Alaska summit between Donald Trump and Vladimir Putin ended without the promised breakthrough on Ukraine, it was declared a failure. But, as I argued last week, it was never about Ukraine; it was always about reopening Russia for business.
The business of ending the Ukraine war has become inseparable from business itself. The Reuters revelations and the WSJ reporting on Exxon’s secret negotiations with Rosneft have only confirmed how deeply commercial interests have penetrated what should be diplomatic negotiations.
What we’re seeing isn’t merely a peace process – it’s a three-way negotiation where territorial settlements, corporate restoration, and reconstruction contracts are being horse-traded in real time.
According to the World Bank’s latest assessment, the total cost of reconstruction and recovery in Ukraine will be $524 billion over the next decade. That figure –nearly three times Ukraine’s expected 2024 GDP – has become the gravitational core around which all negotiations now revolve.
1 India: “Special” Partner to Sanctioned Scapegoat
The cold brutality of India’s treatment exposes the transactional cynicism of the new world order.
To prevent global oil price spikes, the United States encouraged India to buy Russian oil after the Ukraine invasion. Former US Ambassador Eric Garcetti admitted in a video that went viral:
“They bought Russian oil because we wanted somebody to buy Russian oil… It was actually the design of the policy.”
That same policy is now the pretext for 50% tariffs – among the highest Trump has imposed on any nation. When Treasury Secretary Scott Bessent refers to “some of the richest families in India,” he is pointing directly at multi-billionaire Mukesh Ambani and Reliance Industries.
In the first seven months of 2025, Ambani’s Jamnagar refinery imported 18.3 million tonnes of crude oil from Russia, worth some $8.7 billion.
Nice business, you might think. But there’s a twist. In 2025, the US imported $1.4 billion of oil products from that refinery. America is literally buying back Russian oil that India refined and punishing India for refining it. Ambani’s Reliance, which pivoted to Russian crude to serve Western markets whilst keeping prices stable, now finds itself branded as a war profiteer.
Prime Minister Modi might have thought his personal relationship with Trump, Vance’s Indian-American connections, and India’s strategic importance in countering China provided some leverage.
Instead, he’s discovered that India was merely a convenient intermediary – useful when America needed someone to buy Russian oil without admitting it; disposable when Trump needed to squeeze Putin further.
The nation that deftly balanced Washington and Moscow through the Cold War has found itself reduced to a bargaining chip. Trump even cited India’s purchases from Russia as helping “prop up a Russian war machine” despite America having created exactly this outcome.
China, which imports far more Russian oil, faces no such penalties. The message is unmistakable: India bought the same “special relationship” fiction that Britain still laps up. It too is discovering how hollow that is.
When push came to shove, Washington would rather accommodate Beijing than reward Delhi. Modi’s planned visit to China, his first in seven years, represents not diplomatic expansion but desperate recalibration after being comprehensively outmanoeuvred.
2 Europe’s Systematic Demolition
Europe’s marginalisation is even more complete, though wrapped up in diplomatic niceties. The continent that bore the economic shock of sanctioning Russia, that welcomed Ukrainian refugees, and that pledged the majority of reconstruction funds has been systematically excluded from meaningful negotiations.
European proposals for phased sanctions relief tied to verifiable Russian withdrawal – painstakingly negotiated over months – were ignored in Alaska. The shift from “ceasefire first” (Europe’s position) to “comprehensive peace agreement” (Putin’s preference) happened without consulting Brussels, Berlin, or Paris. European leaders learned about it from Trump’s social media posts.
But it’s the energy dimension that reveals the painful depth of Europe’s subjugation. Having spent three years painfully weaning itself off Russian gas – at enormous economic and political cost – Europe now watches as Trump and Putin discuss bilateral US-Russia energy deals.
One such deal is the Arctic LNG 2 project, a significant energy project meant to be strangled by sanctions. Still, it is now being revived as an opportunity for American technology to dominate the European energy market. The message to Europe? Your energy security sacrifices were a waste of time and effort.
Europe provides roughly 60% of Ukraine’s reconstruction pledges, but will control perhaps 20% of contracts. European companies that took uncomfortable stands – BASF’s $6 billion write-off, Siemens’ abandoned ventures, Mercedes-Benz’s frozen investments – watch American competitors position for re-entry.
Europe is being transformed from partner to paymaster, funding a reconstruction it won’t control and implementing a peace it didn’t negotiate.
Most insidiously, Europe’s energy dependence isn’t being eliminated – it’s being restructured. Instead of Russian gas, Europe will buy American LNG at premium prices. Instead of Russian oil, Europe will import refined products from India (made from Russian crude) at marked-up rates. The dependency continues; only the intermediaries and profit margins change.
And meanwhile earlier this year, American investors were being pitched to back a revived Nordstream 2. The subtext? The US doesn’t mind Europe taking Russian gas, provided it gets a cut.
When Macron spoke of European “strategic autonomy,” this was not what he envisioned. Europe has discovered it possesses neither strategy nor autonomy – merely the privilege of paying bills whilst Washington and Moscow divide the spoils.
3 The Corporate Coalition Shows Its Hand
On 15 August, the day Trump met Putin in Alaska, the Russian president also signed a decree allowing foreign companies to reclaim their Russian assets – conditional on lobbying against sanctions.
As the WSJ revealed, Exxon’s Senior Vice President Neil Chapman had already been meeting Rosneft CEO Igor Sechin in Doha, negotiating the company’s return to the Sakhalin-1 project.
These weren’t rogue negotiations. Reuters reported that both the Biden and the Trump administrations had granted Treasury licences for these discussions. The infrastructure for corporate restoration was being built whilst public attention, distracted by the latest battlefield developments in Ukraine, focused on the more immediate and visible aspects of the conflict.
Exxon does not just want to recover assets; it wants guaranteed returns on the $4.6 billion it wrote off, protection from future sanctions, and preferential access to Arctic developments. The company’s strategic patience and White House discussions with President Trump point to a carefully orchestrated campaign where peace and corporate terms go hand in hand.
Meanwhile, in Europe, Austria’s Raiffeisen Bank earns nearly half its profits from Russia – money trapped by sanctions. Deutsche Bank, which laundered $10 billion for Russian clients whilst lending Trump $2 billion, maintains its peculiar position at the intersection of all these interests. These aren’t neutral observers but active participants with billions at stake in the peace’s structure.
4 Ukraine’s Calculated Desperation
Meanwhile, Ukraine has launched its asymmetric response through a systematic campaign targeting Russian energy infrastructure. Ukrainian drone strikes have knocked out approximately a fifth of Russia’s refining capacity in a calculated economic warfare strategy.
Their strategy operates on multiple levels. Russia has been ramping up oil refining output to get round sanctions on its crude oil exports. Ukrainian operations have been credited with cutting the volume of Russian oil refined to its lowest level in 12 years. Russian seaborne oil exports fell nearly 10 per cent in 2024.
Russian gasoline prices rose by 11 per cent over 2024, while diesel increased by 8.5 per cent, forcing the government to extend its ban on fuel exports. Russia accounts for over 7 per cent of total world diesel supply, making these disruptions particularly significant for global energy flows.
Ukraine’s targeting demonstrates a sophisticated understanding of energy vulnerabilities. Several targeted refineries had previously won contracts with the Russian military, with facilities like LUKOIL’s Volgograd and NORSI supplying oil products and jet fuel.
Every refinery burning, every pipeline hit, every export terminal damaged reduces both the value of assets Western companies hope to reclaim and Russia’s capacity to fund its war machine.
Ukraine understands the logic. If peace negotiations have become corporate deals, degrading assets becomes a form of resistance. The strikes on the Druzhba pipeline did not just hit Russian revenues but European energy assumptions. The message: if Ukraine’s sovereignty is negotiable, so is Europe’s energy security.
It’s not just Trump. In the run up to 2024’s presidential elections, the Biden administration urged Ukraine to refrain from attacking refineries, arguing the disruption could increase oil prices.
Yet despite media attention, the actual impact on global oil prices has been minimal, with key energy futures remaining largely unresponsive to the attacks.
It’s a dangerous gambit that risks alienating allies. But what alternative does Ukraine have when its Western “supporters” are already negotiating the terms of its dismemberment?
5 The Reconstruction Racket
Housing accounts for almost $84 billion of reconstruction needs, transport for almost $78 billion, and energy and extractives for almost $68 billion. These aren’t humanitarian categories but investment opportunities, and the scramble has already begun.
Erik Prince’s 2017 Seychelles meeting with Kirill Dmitriev wasn’t just about establishing back channels – it was about positioning for reconstruction contracts. Companies facilitating peace expect preferential access to rebuilding. The assumption pervading corporate boardrooms is that whoever brokers the peace controls the contracts.
Russia’s territories contain Europe’s largest lithium reserves, massive titanium deposits, and vast agricultural lands worth trillions. A “peace” leaving Russia in control doesn’t just reward aggression – it creates a corporate partnership where Western companies profit from Russian conquest. Reconstruction becomes collaboration, rebuilding becomes legitimisation.
6 The Precedent Being Set
We’re witnessing the normalisation of conquest as a negotiable business proposition. Wait long enough, and corporate interests will override moral imperatives. The companies that fled Russia amid public outrage in 2022 now manoeuvre for returns requiring Ukrainian territorial concessions.
The mythology that economic interdependence prevents conflict lies in ruins. Western investment in Russia didn’t stop Georgia, Crimea, or Ukraine – it funded Putin’s military modernisation. Yet here we are, preparing to repeat the cycle, with corporate advocates insisting engagement moderates behaviour despite overwhelming contrary evidence.
Treasury officials might argue that involving corporations creates peace among stakeholders. Perhaps. However, it assumes corporate interests align with sustainable peace rather than sustainable profits. History suggests otherwise. Every previous attempt at economic integration with authoritarian regimes has ended the same way: with corporations defending their investments long after those regimes turned aggressive.
7 The Path Ahead
The answer isn’t excluding private capital – that’s neither realistic nor desirable given the scale. But we could establish principles that protect both Ukraine’s sovereignty and reconstruction’s integrity:
First, create an independent reconstruction authority with Ukrainian leadership and international oversight to prevent any single country or corporate coalition from dominating the process.
Second, tie corporate participation to verifiable commitments. Companies wanting reconstruction contracts must first contribute to victims’ compensation. Those seeking Russian operations must demonstrate how they serve Ukrainian, not shareholder, interests.
Third, transparent criteria for sanctions relief should be established and linked to concrete steps: troop withdrawals, war crimes accountability, and reparations payments. Corporate lobbying cannot accelerate this timeline.
Fourth, guarantee that resources in occupied territories cannot be exploited by Russia or partners for a defined period, removing economic incentives for territorial conquest.
Last week, I warned that the business of Ukraine peace was becoming just business. This week’s developments – from India’s humiliation to Europe’s marginalisation to Exxon’s manoeuvring – only seem to confirm that forecast.
The question now isn’t whether corporate interests will influence peace but whether any countervailing force will ensure the public good isn’t entirely subordinated to private gain.
The immediate winners are visible: energy companies reclaiming Russian assets, traders resuming commodity flows, contractors securing reconstruction deals. The losers are equally clear: Ukrainian sovereignty, European influence, and Indian strategic autonomy.
Oh yes, and the principle that aggression shouldn’t pay.
But the longest-term loser may be the international system itself. If invasions can be retroactively legitimised through corporate dealmaking, sanctions become temporary inconveniences, and reconstruction contracts can offset public opprobrium. It’s not so much incentivising peace as pricing the next war.
The business of Ukraine peace was always going to be business. The tragedy isn’t that reality – we’re no longer pretending otherwise.
Thanks for reading!
Best
Adrian
