The Energy War That Russia Can’t Ignore In Ukraine Negotiations

As Washington circulates a 28-point “peace” plan for Ukraine, the real war is being fought in pipelines, refineries, and power grids. From the Nord Stream 2 sabotage —still publicly unattributed and disputed by Western intelligence services— to strikes on Russian fuel depots and Ukrainian substations, both sides are targeting energy infrastructure. Russia has taken a significant hit to refining and storage capacity, while Ukraine’s grid and generation remain vulnerable. The energy battlefield is reshaping leverage — and any diplomatic proposal that ignores it miscalculates reality.

The Trump administration’s peace plan, as summarized by Anne Applebaum, rewards Russian aggression, undermines NATO, and offers Moscow economic and territorial rewards without accountability. Yet energy realities suggest Russia is not as dominant as the plan assumes. As Applebaum writes in The Atlantic: “The central points of the plan reflect long-standing Russian demands. It is not a peace plan. It is a proposal that weakens Ukraine and divides America from Europe, preparing the way for a larger war in the future.”

According to Applebaum’s reporting, the plan envisions Russia retaining control over Crimea, Donetsk, Luhansk, and the occupied territories of Zaporizhzhia and Kherson. Ukraine would cap its armed forces at 600,000 troops, hold new elections within 100 days—Russia has been holding sham elections for two decades—renounce NATO membership in its constitution, and accept limitations on foreign troop deployments. Economic relief and reconstruction aid would flow largely under U.S. oversight, with Moscow benefiting from the reintegration of sanctions relief and global markets.

While the plan emphasizes Ukraine’s sovereignty and security guarantees, neither appears credible in practice. The Economist notes: “Under Mr. Trump it is not clear that America would go to war with Russia even over NATO. The plan for Ukraine hinges entirely on Trump’s whims.” In other words, the 28-point proposal effectively shifts leverage to Russia—on paper.

But the energy story is more complex. Russia has lost substantial refining capacity, oil depots, and key storage hubs to Ukrainian drone and missile strikes. Most of the refinery damage occurred between late 2024 and mid-2025, reflecting a deliberate Ukrainian campaign to disrupt wartime fuel logistics. For example, several refineries and pipelines near Moscow and in western Russia have been disrupted, constraining both military and civilian fuel supply.

Ukraine has also sustained heavy losses: power plants, substations, and transmission networks are repeatedly hit, leaving millions without power. However, emergency grid repairs, donor-funded transformers, and rapid equipment replacement now restore power in days.

Energy battlefield—Who’s Taking The Hit?

Energy data highlight this imbalance. Russian refineries, according to industry reports, have lost hundreds of thousands of barrels per day in processing capacity due to targeted attacks. Ukrainian grid outages—while severe—are increasingly mitigated by emergency repairs, microgrid deployment, and decentralized storage.

Europe has also sharply reduced its dependence on Russian energy—from about 40% of gas imports before the invasion to 10% today—further weakening Moscow’s leverage. In short, Russia’s energy advantage is eroding even as it occupies Ukrainian territory.

Specifically, over the past year, Ukraine’s drone and missile strikes have severely disrupted Russia’s refining capacity. According to Hydrocarbon Processing, Ukrainians disabled about 17% of Russia’s oil-refining capacity—roughly 1.2 million barrels per day. This took 6.4 million tons of capacity offline. The KyivPost also reports that Ukrainian drones eliminated 20% of Russia’s capacity in August and October, although Russia restored much of the damage by reactivating idle refinery units.

Looking ahead, this decline in refining capacity could impose significant limits on Russia’s ability to export fuel and generate wartime revenue. Experts warn that ongoing infrastructure damage may soon reach a breaking point—especially as persistent attacks extend repair times, increase maintenance costs, and hinder access to essential spare parts. The Kyiv Independent claims long-range strikes have cost Russia 4.11% of its GDP in 2025, or $74.1 billion, though the estimate depends on modeling assumptions and may fluctuate as repairs accelerate.

The energy battlefield reshapes negotiations. The peace plan Russia’s dominance and Ukraine’s weakness—but Ukraine has inflicted strategic damage on Moscow. A ceasefire that rewards territorial gains without considering ongoing energy losses misprices negotiations. Practically speaking, Russia’s economy and energy infrastructure are not fully intact, reducing the leverage the plan implicitly gives Moscow.

Applebaum underscores the risk of misreading incentives: “It benefits unnamed Russian and American investors, at the expense of everyone else.” Beyond geopolitics, this highlights how economic arrangements—energy deals, infrastructure investments, and corporate opportunities—could flow to parties with disproportionate gain, leaving Europe and Ukraine to shoulder reconstruction costs. “Putin has spoken of ‘several companies’ positioning themselves to resume business ties between his country and the United States.”

Capitulation Is A Bad Peace Plan

Secretary of State Marco Rubio has acknowledged the need for concessions. Speaking on January 12 to CBS News about the Trump proposal, he said: “Both sides are going to have to make concessions. You can’t have a peace agreement unless both sides make concessions—that’s a fact. If not, it’s just called surrender.”

In this framing, proponents argue that war fatigue, depleted resources, and political pressures make a negotiated compromise, however imperfect, preferable to continued escalation. They note that Ukraine’s leadership has contributed to drafting the plan, and that a temporary freeze in hostilities could allow Europe and the U.S. to stabilize energy supplies and reallocate resources.

“I am not for the first draft, but I am for the push to peace,” Iuliia Mendel, President Zelensky’s former press secretary, told me. “Who thinks about people in Ukraine dying every day? I think the major thing is to stop mass murders.”

Realism, of course, is paramount—especially the lives of both Ukrainians and Russians, whose soldiers are giving their lives by the hundreds of thousands. To that end, Russia’s bargaining power is already constrained.

The Economist warns: “If (Trump) is able to push through his plan for Ukraine, the countries of NATO will be weaker and Russia stronger.”

Yet in the energy domain, Russia is neither invulnerable nor fully capable of sustaining pressure indefinitely. Ukrainian strikes, coupled with European diversification of energy sources, mean the Kremlin does not hold all the cards the plan assumes it does. Any deal ignoring these realities risks overcompensating Moscow, rewarding aggression, and undermining deterrence.

The stakes extend beyond Ukraine. NATO’s cohesion, European energy security, and global markets are all affected by the interplay of war, diplomacy, and energy. Misjudging Russia’s strength and gains could lead to strategic miscalculations, setting the stage for future conflict. Energy is not peripheral; it is central.

The proposed 28-point plan misreads both Russia’s and Ukraine’s true strategic positions. By rewarding conquest, undermining collective defense, and ignoring the energy battlefield, we capitulate to Russia’s demands and consolidate its military gains. The energy war demonstrates that it is not invincible. In fact, the West still retains tools to shape outcomes. Any agreement that fails to incorporate this reality is not peace—it is a pause in which the next confrontation can be even costlier.

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