According to Reuters and many other news outlets, Russian officials have informed Ukrainian officials that Russia will immediately end military operations if four conditions are met: Ukraine ceases its own military action, Ukraine changes its constitution to enshrine neutrality, Ukraine acknowledges Crimea as a Russian territory, and Ukraine recognizes the separatist republics of Donetsk and Lugansk as independent states. Predicting the future is difficult, but we actually believe there is a good chance that the military conflict will soon come to an end. As far as the war and Russia's advance are concerned, these demands are reasonable at this point.
The Donetsk and Lugansk demand is reasonable considering that Russian-backed separatists in Donetsk and Luhansk declared they were independent "people's republics" all the way back in 2014, and that at this point the Russian military has already taken these two regions. Ukraine's government has stated that since 2014 approximately 15,000 people have been killed fighting in these separatist regions during the last eight years. A change for Donetsk and Lugansk has been reasonable and the Russian military has now already taken these two regions.
The Crimea demand is reasonable considering that Crimea was annexed back in 2014 and that fairly quickly the world moved on.
The Ukraine ceasing its own military action demand is a given for any truce.
The Ukraine changing its constitution to enshrine neutrality, in our opinion, is really what is at the heart of the matter at this point. Specifically, Russia wants Ukraine to make amendments to its constitution so that Ukraine "would reject any aims to enter any bloc." Put in other words, Russia wants to make sure Ukraine does not join NATO. In our opinion, this is reasonable. No country wants foregin troops on its border, and this year's earlier speculation of Ukraine possibly joining NATO was the catalyst for Russia invasion.
Overall, these demands are not surprising. Russia has Crimea, Donetsk, and Lugansk -- and now they want Ukraine to agree not to join NATO. It has always been in Russia's best interest for Ukraine to not join NATO. Again, it is in every country's best interest to not have foregin troops on its borders. The question now is it in Ukraine's best interest to agree not to join NATO? We will let Ukraine answer that question. If the conflict does end soon, this will alleviate our longer-term Ukraine/Russian concerns for the dry bulk shipping market (as long as Ukraine's coarse grain harvest is still able to reach levels close to previously expected).
We must of course also stress that we do not view Russia's military conflict in Ukraine as reasonable. As we have stressed in our Weekly Dry Bulk Reports and special updates, Russia's actions have been tragic, any further loss of life will be tragic, deaths have been much more significant compared to shipping operations, and most important is a return to normal daily life. We stressed these sentiments first on February 24th and we continue to stress this. As the conflict is now in its twelfth day, and as Russia's military has advanced, our coverage is focused on examining how the conflict could end and how the shipping and commodity markets could be affected. In a military conflict, we only are discussing negotiation terms along the lines of two nations/militaries and not what is just, fair, ethical, moral, or humane for the people involved. Violence and deaths are never just, fair, ethical, moral, or humane... and certainly never reasonable. We continue to hope that the conflict ends as quickly and peacefully as possible.