What are the outlines and risks of a possible Ukraine peace deal?

A Russian self-propelled multiple rocket launcher fires towards Ukrainian positions in Ukraine in image from video distributed on Tuesday, May 13, 2025. (Russian Defence Ministry Press Service via AP) (AP)

Russia and Ukraine say they want to talk about peace so what are the contours of any potential peace deal - and what are the dangers?

Security guarantee

Ukraine, which was subject to a full-scale invasion in 2022 and saw Russia annex Crimea in 2014, says it needs security guarantees from the major powers - primarily the United States.

It wants more than the 1994 Budapest Memorandum under which Russia, the U.S. and Britain agreed to respect Ukrainian sovereignty and refrain from the use of force against Ukraine. Under that deal, the powers simply promised to go to the United Nations Security Council if Ukraine was attacked.

The problem, say sources involved in the discussions, is that any security guarantee that has teeth would lock the West into a potential future war with Russia - and any security deal without teeth would leave Ukraine exposed.

Under draft proposals for a possible peace settlement seen by Reuters, diplomats spoke of a “robust security guarantee,” including possibly an Article 5-like agreement. Article 5 of the NATO treaty commits allies to defend each other in the event of an attack, though Ukraine is not a member of the alliance.

As part of a failed 2022 deal, Ukraine would have agreed to permanent neutrality in return for security guarantees from the five permanent members of the UN Security Council: Britain, China, France, Russia and the United States, and other nations including Belarus, Canada, Germany, Israel, Poland and Turkey, according to a draft seen by Reuters.

But officials in Kyiv say agreeing to Ukrainian neutrality is a red line they will not cross.

NATO and neutrality

Russia has repeatedly said that possible NATO membership for Kyiv was a cause of the war, is unacceptable and that Ukraine must be neutral - with no foreign bases. Zelenskyy has said it is not for Moscow to decide Ukraine’s alliances.

At the 2008 Bucharest summit, NATO leaders agreed that Ukraine and Georgia would one day become members. Ukraine in 2019 amended its constitution, committing to the path of full membership of NATO and the European Union.

U.S. envoy General Keith Kellogg has said NATO membership for Ukraine is “off the table.” President Donald Trump has said past U.S. support for Ukraine’s membership of NATO was a cause of the war.

In 2022, Ukraine and Russia discussed permanent neutrality. Russia wanted limits on the Ukrainian military, according to a copy of a potential agreement reviewed by Reuters. Ukraine staunchly opposes the idea of curbs to the size and capabilities of its armed forces.

Russia has said it has no objections to Ukraine seeking EU membership, though some members of the bloc could oppose Kyiv’s bid.

Territory

Moscow controls about a fifth of Ukraine and says the territory is now formally part of Russia, a position most countries do not accept.

Russia annexed Crimea in 2014. Russian forces control almost all of Luhansk, and more than 70% of Donetsk, Zaporizhzhia and Kherson regions, according to Russian estimates. Russia also controls a sliver of Kharkiv region.

In Putin’s most detailed public proposals for peace, outlined in June 2024, he said Ukraine would have to withdraw from the entirety of those regions - so even from areas not currently under Russian control.

Under a draft peace plan crafted by the Trump administration, the U.S. would de jure recognize Russian control of Crimea, and de facto recognize Russian control of Luhansk and parts of Zaporizhzhia, Donetsk and Kherson.

Ukraine would regain territory in Kharkiv region, while the U.S. would control and administer Zaporizhzhia Nuclear Power Plant, which is currently controlled by Russia.

Kyiv says that legally recognizing Russian sovereignty over occupied areas is out of the question and would violate Ukraine’s constitution, but that territorial matters could be discussed at talks once a ceasefire is in place.

“The major issues here are the regions, the nuclear plant, it’s how the Ukrainians are able to use the Dnieper River and get out to the ocean,” Trump envoy Steve Witkoff told Breitbart News last week.

Sanctions

Russia wants Western sanctions lifted but is skeptical that they will be lifted soon. Even if the U.S. lifted sanctions, EU and other Western sanctions - such as those imposed by Australia, Britain, Canada and Japan - could remain for years to come. Ukraine wants the sanctions to remain in place.

Reuters has reported that the U.S. government is studying ways it could ease sanctions on Russia’s energy sector as part of a broad plan to enable Washington to deliver swift relief if Moscow agrees to end the Ukraine war.

Oil and gas

Trump has suggested that Putin, who leads the world’s second largest oil exporter, might be more inclined to resolve the Ukraine war following a recent drop in oil prices, though the Kremlin said national interests trump oil prices.

Still, some diplomats have speculated that the U.S., Russia and Saudi Arabia are seeking lower oil prices as part of a bigger grand bargain that involves issues from the Middle East to Ukraine.

Earlier this month, Reuters reported that officials from Washington and Moscow have held discussions about the U.S. helping to revive Russian gas sales to Europe.

Ceasefire

European powers and Ukraine demand Russia agree to a ceasefire before talks but Moscow says a ceasefire will only work once verification issues are sorted out. Kyiv says Moscow is playing for time.

Reconstruction of Ukraine

The reconstruction of Ukraine will cost hundreds of billions of dollars, and European powers want to use some of the Russian sovereign assets frozen in the West to help Kyiv. Russia says that is unacceptable.

Russia could agree to using US$300 billion of sovereign assets frozen in Europe for reconstruction in Ukraine but will insist that part of the money is spent on the one-fifth of the country that Moscow’s forces control, Reuters reported in February.

Ukraine has said it wants all the $300 billion of seized assets to be poured into post-war reconstruction.

Reporting by Guy Faulconbridge; Editing by Gareth Jones, Reuters