A long-term minerals deal first mooted in February has now been signed between the US and Ukraine.
The agreement – labelled a reconstruction investment fund – is evidence of an improvement of relations between the two countries following US President Trump and Ukraine leader Volodymyr Zelensky’s high-profile spat in The White House at the end of February, when the deal collapsed. It is designed to accelerate Ukraine’s post-war recovery while placing more pressure on Russia President Vladimir Putin to end the war. Latest reports indicate the agreement includes provisions for new oil and gas projects, and related infrastructure, as well as minerals.
Ukraine contains large reserves of graphite, titanium and lithium, all of which are vital to the energy transition, as well as abundant gas reserves, estimated at over 670 billion cubic metres (cbm).
“This economic partnership positions our two countries to work collaboratively and invest together to ensure that our mutual assets, talents, and capabilities can accelerate Ukraine’s economic recovery,” the US Treasury statement reads. Notably it also included recognition of Russia’s “full scale invasion”.
Source: Conflict and Environment Observatory
But the deal comes amid ongoing attacks on Odesa on the Black Sea in southern Ukraine. There is no sign of Russia scaling back attacks on Ukraine, raising fundamental questions on when and how the conflict will end and the reconstruction fund be implemented.
US Secretary of the Treasury Scott Bessent said, “This agreement signals clearly to Russia that the Trump administration is committed to a peace process centred on a free, sovereign, and prosperous Ukraine over the long term.”
Speaking on UK radio, Yuriy Sak, former Ukraine Minister of Defence, said it was a “good deal”.
“It took longer than expected as both teams worked hard to make sure it’s about partnership and mutually beneficial projects. We have to view it as part of the wider negotiating process. The next stage will be further pursuing this strategy of ‘peace through force’.”
Ukraine’s state-owned oil and gas company Naftogaz has established a ‘new energy business unit’ focusing on hydrogen, bioenergy, and carbon capture to capitalise on opportunities once the war ends.
In March it signed a contract with Orlen, one of the largest oil industry corporations in Central and Eastern Europe, for the supply of an additional 100 million cbm of liquefied natural gas.
