Overview
Three people with close ties to the Kremlin told Reuters that President Vladimir Putin has refused offers to negotiate a settlement with Kyiv and is instead leaning toward an expansion of military operations. Sources familiar with his thinking said recent Ukrainian drone attacks on Russian oil refineries, ports and storage facilities have hardened the Kremlin’s stance and reinforced a decision to keep fighting rather than pursue an immediate diplomatic resolution.
Sources and signals from the Kremlin
Two of the three Kremlin-connected sources, speaking on condition of anonymity, stated that Putin is likely to escalate the conflict during the months ahead. One source who meets with the president regularly described a "high probability" that such escalation will occur. That person said Putin had "dug in his heels" on the objective of seizing the remaining Ukrainian-held territory in the eastern Donbas region, where Russian advances have notably slowed this year.
The same source said the president rebuked advisers who proposed a compromise based on a ceasefire along current front lines. A second source conveyed that Putin believes Russia will soon capture Donbas, while Kremlin spokespeople have publicly stressed both a preference for peace and a readiness to continue military operations.
When asked for a comment for this story, Kremlin spokesman Dmitry Peskov said: "Russia is ready for a peaceful resolution but has enough capability to act independently and continue the special military operation."
Diplomatic context and parallel contacts
The reporting notes U.S. President Donald Trump recently said Putin wanted the war to end and that a resolution was "closer than people realize." Last week, Trump held separate phone conversations with Putin and Ukrainian President Volodymyr Zelenskiy and met Zelenskiy at a NATO summit; the Ukrainian leader said they discussed "ideas to bring peace closer." The White House did not reply to requests for comment in relation to this reporting.
The Kremlin source who meets the president regularly said that Putin publicly rebuffed a June appeal from Zelenskiy for a meeting and a ceasefire.
Ukrainian intelligence and Western assessments
A senior Ukrainian official, responding to a request for comment, said Kyiv’s intelligence assessments in recent months point not toward preparations for peace negotiations but toward planning for further military steps - including fresh operations inside Ukraine or even the possibility of an attack on another European country. The official cited intelligence reports that, they said, indicate Putin is preparing for further steps in the war rather than for peace.
Some Western military analysts argue that, to achieve the objective of taking Donbas, Russia would likely need to impose a mandatory draft of men of fighting age - a politically fraught measure that authorities in Moscow have been reluctant to employ since early in the conflict. The draft remains an unpopular option domestically, according to those assessments cited in the reporting.
Public debate inside Russia and possible escalation paths
Russian military commentators and experts have increasingly addressed the prospect of escalation in public forums. Among the escalation scenarios discussed is the striking of European targets - including NATO bases in the Baltic countries. Such attacks, analysts say, would risk an unwanted and direct confrontation with the U.S.-led alliance, potentially testing NATO's collective defense commitment that an attack on one member is an attack on all.
Jack Watling of the Royal United Services Institute (RUSI) in London said that Russia might aim to create divisions within NATO through isolated strikes, similar to a recent Russian drone strike on Romania. "The Russians would not be aiming for a war with NATO. But it could be used to divide NATO over how to respond," Watling said. He added that escalating tensions with NATO could bolster a domestic political narrative within Russia for introducing military conscription.
Economic and civilian impact of recent strikes
Repeated assaults on oil refineries, ports and fuel-storage facilities in Russia and Russian-occupied areas of Ukraine have led to pronounced fuel shortages, bringing the costs and consequences of the war into everyday life for millions of Russians. While Putin's approval rating remains broadly high, the same poll cited in the reporting showed it recently fell to its lowest level since the full-scale invasion began in early 2022.
Ukraine's allies have pointed to what they describe as a momentum shift on the battlefield and some have called for additional economic sanctions designed to pressure Moscow to end the conflict. According to the Kremlin-connected source who meets with the president, Ukraine's recent operational successes have increased Putin's anger and hardened his resolve to respond forcefully.
Recent military actions and official statements
In the week before this reporting, Russian forces carried out two major drone and missile strikes on Ukrainian territory, including attacks on the capital, Kyiv. Ukrainian officials say dozens of civilians were killed; Russian authorities stated the strikes targeted military facilities.
In televised remarks to military leaders last week, Putin said that Ukraine’s strikes on energy assets justified efforts to secure additional Ukrainian territory along the border, beyond Donbas, creating what he described as a "security zone." A former Russian defence ministry official, Andrei Ilnitsky, wrote in a June 29 column in Kommersant that a next phase of escalation could begin with the destruction of some 30 major industrial sites in Ukraine, among them a steel plant and the port of Odesa.
The reporting noted that Russia has already inflicted widespread damage on commercial businesses and ports across Ukraine and that repeated strikes on power infrastructure have disrupted production and exports.
Ilnitsky also suggested the campaign could extend to strikes on NATO facilities in the Baltic states and Romania, as well as on European Union sites connected to the production of long-range drones and missiles supplied to Ukraine. Asked about that column, Kremlin spokesman Peskov told reporters that Russia should reinforce its own security and could not "close its eyes" to what he described as the militarization of Europe.
Battlefield dynamics in Donbas
Talk of escalation comes against a backdrop of slower Russian gains on the battlefield, prompting concerns that capturing the Donbas could demand prolonged combat and significant casualties. The reporting cited a recent estimate from the Center for Strategic & International Studies that around two million soldiers had been killed, wounded or were missing since the full-scale invasion began in early 2022, with some 1.4 million of those described as Russian. The article notes that neither side publishes official casualty figures.
Russian assault forces have struggled to make substantive advances along a roughly 1,200-kilometer front this year as Ukrainian unmanned aerial systems have helped to blunt Russia’s numerical advantage. Recent fighting has focused on Kostiantynivka, a city inside Ukraine’s defensive "fortress belt" in the Donetsk region. On July 3, Putin declared Russian forces had seized Kostiantynivka; Ukraine denied that claim.
According to the Kremlin source who meets Putin regularly, during a subsequent phone call with President Trump, Putin sought to reassure the U.S. leader that Russia would take the remaining roughly one-fifth of the Donetsk region that remains under Ukrainian control. The same source said Putin views control of that territory as a matter of principle and told associates he "needs some kind of victory."
Key points
- President Putin is reported by three Kremlin-linked sources to be rejecting negotiations and is likely to escalate military operations in the coming months - energy and transport infrastructure attacks appear to have hardened his stance.
- Repeated strikes on refineries, ports and storage depots have produced severe fuel shortages and disrupted production and exports, affecting energy supply chains and trade flows.
- Analysts and former officials have publicly discussed possible escalation scenarios, including strikes on NATO-adjacent targets - raising geopolitical risks for defence, shipping and energy sectors.
Risks and uncertainties
- Escalation risk - Sources close to the Kremlin warn of a significant likelihood of intensified military action, which would increase volatility in energy and commodity markets and further strain logistics and export channels.
- NATO confrontation risk - Public discussion of strikes on NATO bases or European defense facilities raises the uncertainty of a wider security confrontation, with implications for defence spending and alliance cohesion.
- Domestic political risk in Russia - The potential need for a mandatory draft to achieve battlefield objectives is politically sensitive and could spark domestic unrest, with domestic economic and labor-market implications.