• Russia strengthens military dominance by retaking Kursk and expanding control in eastern Ukraine, defying Western predictions.
• Ukraine pivots to economic resilience, sealing revised trade deals with the EU and critical mineral cooperation with the U.S.
• Peace talks gain momentum under Trump’s envoy, though Moscow and Kyiv remain far apart on territorial terms.
• Civilian and military tolls mount, with Ukraine facing internal discipline issues amid ongoing Russian drone and missile strikes.

As the third anniversary of Russia’s full-scale invasion of Ukraine approaches, the battlefields are witnessing dramatic reversals. Russia, claiming to have fully expelled Ukrainian forces from its Kursk region, appears to be on a roll militarily. At the same time, Ukraine, faced with mounting casualties and territorial losses, has launched a parallel campaign—one of diplomacy, economic revival, and strategic trade partnerships. The war, now deeply entrenched, has become a tale of two strategies: Moscow’s military muscle versus Kyiv’s soft power maneuvering.

Russia’s Advance: Kursk Retaken, Buffer Zone Expanding

The turning point came with Ukraine’s bold incursion into Russia’s Kursk region last August—an operation that marked the largest penetration into Russian territory since World War II. Initially successful, Ukraine briefly held nearly 1,400 square kilometers, hoping to gain leverage in upcoming peace talks. But the costs were steep. Within months, Russian forces not only reversed the incursion but also launched a counteroffensive that reclaimed over 2,000 square kilometers of Ukrainian territory.

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Backed by North Korean shells and troops—an increasingly visible alliance—Moscow’s military tightened its grip across eastern Ukraine, with Kremlin generals citing gains in Sumy and parts of Kharkiv. President Vladimir Putin, flanked by General Valery Gerasimov, declared Kursk “cleared” and vowed to continue carving out a buffer zone along the border. Fibre-optic drones, harder to jam than their Western counterparts, helped secure these advances.

While the West accuses Moscow of stalling peace talks, the Kremlin insists it’s committed to diplomacy—but on its terms. “No one is delaying anything here,” Kremlin spokesman Dmitry Peskov declared this week, rebutting claims from Trump’s Ukraine envoy Keith Kellogg.

Kursk: Bargaining Chip Lost

Kyiv had hoped that its Kursk operation would serve as a bargaining chip. But with that area now lost and Ukrainian forces in retreat, President Volodymyr Zelensky faces a challenging hand at the negotiation table. Trump’s administration has revived diplomatic shuttle talks, but insiders suggest huge gaps remain in reconciling territorial demands.

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Russia reportedly wants to retain control of nearly 20% of Ukraine—territory roughly the size of Pennsylvania. Under U.S. proposals, Ukraine could regain Kharkiv, but Moscow would hold onto Donetsk, Luhansk, and the Crimean corridor. Kyiv’s room for maneuver has shrunk significantly.

Trade and Diplomacy: Ukraine Shifts Gears

In response to battlefield setbacks, Ukraine is rechanneling its efforts into rebuilding the economy and securing critical international trade partnerships.

This week, Ukraine signed a revised trade agreement with the European Union, returning to a quota-based system for sensitive agricultural exports like sugar and poultry. While some tariff-free access remains for low-risk goods such as grape juice and fermented milk, pressure from Eastern European farmers has capped Kyiv’s ambitions in the bloc.

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Simultaneously, Ukraine has been increasing its energy exports. According to ExPro consultancy, electricity exports in June surged to 237 MWh, more than doubling from May. This is a significant leap for a country whose power infrastructure has been under relentless Russian attack. Ukraine is exporting to Hungary, Slovakia, Romania, Moldova, and Poland.

On the mineral front, Ukraine continues to attract Western investment, particularly from the U.S., in rare earth and critical minerals—a strategic pivot aimed at integrating Ukraine into the global supply chain for clean energy and defense. The U.S.-Ukraine mineral cooperation agreement signed earlier this year has drawn attention as a counterbalance to China’s dominance in the rare earth market.

Internal Turmoil and Military Setbacks

Despite its international economic outreach, Ukraine’s internal military discipline has been under scrutiny. A series of deadly Russian strikes on Ukrainian training camps forced the resignation of ground forces commander Mykhailo Drapatyi. His public statement—”We will not win this war if we do not build an army where honor is not just a word but a deed”—struck a nerve in a country trying to stay resilient.

In response, Ukraine’s top general Oleksandr Syrskyi banned troop gatherings in tent encampments and ordered new dugouts to protect soldiers. However, with over 76,000 Ukrainian casualties in the Kursk operation alone (according to Russian estimates), morale remains fragile.

New Frontlines and Civilian Toll

While peace talks continue, violence has not abated. Russian missile and drone strikes on Ukrainian infrastructure, including the city of Sumy, continue to exact a high civilian toll. On June 14, 35 people were killed in a missile strike, and another Ukrainian drone attack killed three in Izhevsk, Russia.

A War of Momentum vs. Resilience

As it stands, Russia appears to be winning militarily. With Putin showcasing battlefield victories and North Korean support, Moscow holds the initiative. But Ukraine, increasingly cornered, is doubling down on diplomacy, trade, and alliances—attempting to insulate itself economically even as it loses ground militarily.

Washington’s peace efforts hang in the balance. If negotiations collapse, the battlefield will likely decide what diplomacy could not.