May 1st, 2025   Next Summary Monday, May 5th

Politics - Rare earth agreement signed 

Combat Ops - Ukrainian probe across border

Weather

Kharkiv

6 and sunny, gusting over 30. Mostly sunny Friday and Saturday then partly to mostly cloudy for the following week. Tomorrow lows around 40 highs around 50, Saturday warming, next week will see lows its eat 50s and highs in the 60 to 70s. Winds westerly, 5-15kts.

Melitopol

71 and mostly cloudy. Mostly sunny through Monday. Daily lows in the 40s, highs in the upper 60s to low 70s. Winds westerly, 5-15kts.

Kyiv

48 and mostly cloudy, gusting over 35. Sunny tomorrow, winds should die down, followed by 5 days of rain showers and thunderstorms. Daily lows in the 40s, daily highs in the 60s. Winds variable, 10-15kts.

Politics and Diplomacy

The US and Ukraine signed a mineral deposit development agreement last night in Washington DC. The deal gives the US preferential treatment in the granting of licenses for development of rare earth deposits and other minerals in Ukraine. In exchange, the US will provide military and financial assistance to Ukraine and will assist in the rebuilding of Ukraine.

Prime Minister Shmyhal said the agreement was “good, equal and beneficial” for both sides.

The full details haven’t been released but, it establishes the United States-Ukraine Reinvestment Fund, jointly managed. 

Ukraine retains ownership of the resources.

The US will contribute to the fund directly or via military assistance.

Ukraine will contribute 50% of revenue for exploitation of critical materials, oil and gas. 

Treasury Secretary Bessent commented on the deal:

"As President Trump said in the Oval that day to Zelenskyy, 'You have no cards'. You know what? President Trump has now dealt him a royal flush.”

Ground Operations 

KURSK Salient

Russian forces are active along the border area of the original Ukrainian salient into Kursk, but it appears that the last Ukrainian position in that area has been overrun.

Further south, about 3 miles north of the northern end of the Ukrainian incursion across the border, north-west of Belgorod, Ukrainian forces - of unknown strength - have crossed the border, heading south-east. This would seem to be an effort to force Russian elements near Demidovka and Popovka (3 miles to the south) to shift focus, thereby reducing pressure on Ukrainian elements that are trapped along the border just west and just south of Popovka.

North-east of Sumy Russian forces appear to have made some small gains near Sadky and Loknya.

NORTH OF KHARKIV

Fighting was again reported in the vicinity of Vovchansk, but there were no confirmed changes in the front line.

NORTH OF THE DONETS RIVER

Russian forces remained on the attack west of the Oskil River, north of Kupyansk, as well as east and south-east of Kupyansk roughly 6 miles, but there were no confirmed changes int he front line in this area.

Fighting also continues north and east of Borova, but there were no confirmed changes to the line.

Further south fighting was also reported west of Terny in a string of 6 towns in a row, stretching out to the north-west, and Russian forces were confirmed to have seized the town of Nove. Russian sources claimed advances in several other towns in this immediate area but they could not be confirmed.

BAKHMUT

Fighting continues in an arc of terrain east of Siversk from the Donets river south but there were no confirmed gains of terrain by either side.

Multiple Russian assault were reported on the western edge of Chasiv Yar as well as other immediate north of the town and to the south, near Predtechyne and Bila Hora, but there were no confirmed changes in the front line.

Further south the Toretsk area, both Russian and Ukrainian forces had some gains. Russian forces attacked at multiple points northward along most of the front line across the northern edge of the town and into several small towns, and made small gains along much of the line. At the same time Ukrainian forces attacked around the east end of the line, just north of Druzhba. In all, Russian forces conducted assaults in 6 different towns in the Toretsk area.

DONETSK CITY

Fighting continues along the entire perimeter of the Pokrovsk salient, from those towns roughly 6 miles out-spout-west of Toretsk, out to Pokrovsk, and around to the south side of the salient, with assaults being reported in the vicinity of 21 different towns, but no gains were confirmed across the salient.

While unconfirmed, reporting from one of the more conservative Ukrainian blogs shows the town of Kostiantinopil, immediately south of the salient, has been overrun by Russian forces. 

Fighting continues north-west of Velyka Novosilke, on the Novosilke - Vesele line, but there were no changes reported.

SOUTHERN UKRAINE

Fighting continues both west and south-east of Orikhiv, but there were no confirmed changes in the line.

Ukrainian forces report an increase in Russian activity - reconnaissance - on the islands in the Dnepr River and along the West Bank of the river.

Air Operations

During the night of April 30th - May 1st Russian forces launched multiple drones into Ukrainian airspace. The UAF claimed it shot down 74 drones, there is no report yet as to the number “lost" (due to EW). Damage was reported in Donetsk, Kharkiv and Kherson oblasts.

During the last 24 hours Russian tacair conducted strikes into 27 different towns.

During the night of April 29th - April 30th Russian forces launched 108 x Shahed drones into Ukrainian airspace. The UAF claimed it shot down 50 drones, and 22 drones  were “lost” (due to EW). Damage was reported in Dnipropetrovsk and Kharkiv oblasts.

Follow-up on the strike of the defense industries factory in Vladimir (200 miles east of Moscow)  on April 29th: a local newspaper claims 1 warehouse and 1 administration building were destroyed in the resulting fire. The official Russian story is that two building suffered minor damage. Assume it is somewhere in between.

Economic Reporting

Feb22   Jun10-22Jun8-23 Jun7 Jan8 Feb7 Mar4 Apr8 Apr30 May1

Brent      94.71      120.90    75.58      80.06 76.69 74.89 70.00 64.80 63.34 61.19

WTI     92.10    119.50  71.29      75.81 73.94 71.17 66.97 61.37 59.53 58.39

NG       3.97        8.41      2.15      2.82 3.66 3.37 4.44 3.69 3.29 3.43

Wheat     8.52       10.71    6.17       6.40 5.37 5.86 5.37 5.38 5.36 5.35

Ruble     85        58.48    82.59      88.77 105.18 96.88 89.50 86.24 81.99 81.97

Hryvnia Pre Oct 2023 - 36.4 42.33 41.46 41.40 41.18 41.56 41.66

Urals 56.56    67.61 71.76 68.32 65.49 52.76 58.35 58.70

ESPO 78.19 N/A 71.50 70 N/A N/A

Sokol 72.79 70.92 67.20 61.42 59.08 57.29

These are the lowest prices bid on oil since spring of 2021.

And the latest estimate out of the Kremlin is that oil revenues for 2025 will be 24% lower than earlier estimates, coming in at $101.7 billion (the original forecast was $133.7 billion), 3.7% of GDP, down from 5.1% of GDP.

Russia’s forecast budget deficit for 2025 has now climbed to 1.7% of GDP for 2025, up from 0.5% of GDP.

Thoughts 

Concerning the negotiations for the rare earths agreement, I continue to be amazed at the manner in which some of the comments from Trump et al are interpreted and only wish I could play poker with most of the journalists, as they appear to have zero grasp of the basic concept of bluffing or negotiating… And clearly do not understand the conceit of “win -win.”

The US gets access to the rare earths, and Ukraine gets a de facto security guarantee…

And the price of oil is dropping. Russia is now at the point of diminishing returns.

v/r pete