Russia is reportedly preparing a military escalation in Ukraine following a complete breakdown of diplomatic channels. The report comes as U.S. intelligence assessments indicate that Russian President Vladimir Putin is eyeing a limited assault on a NATO country to test the alliance's resolve.
Possible escalation: Moscow is planning conventional ballistic
missile strikes on Kyiv's city center and other key urban targets,
Bloomberg reported, citing three people close to the Kremlin. This renewed hostility comes as Russia abandons hope of an agreement with the Trump administration modeled on last August's Alaska summit, which would have forced Ukraine to cede parts of the eastern Donetsk region. Ukraine's refusal to surrender these cities, coupled with Secretary of State Marco Rubio's confirmation that the U.S. does not support Moscow's territorial demands, has left both sides back at square one. Several Russian officials now believe Putin may eventually resort to tactical nuclear weapons to prevent a strategic defeat, breaking a global wartime taboo that has stood since 1945.
Surprise trip: CIA Director John Ratcliffe traveled to Moscow this week to warn Russia
not to attack NATO members, people briefed on the visit told
The Wall Street Journal. U.S. officials are concerned that Putin could target a Baltic nation with a cyberattack or even a small-scale land incursion. Shrinking stockpiles of critical Western weapons due to the Iran war could also
factor into Putin's thinking. President Donald Trump described Ratcliffe's trip as semi-routine. "Something may come out of it. We're working very hard to get that war ended," Trump affirmed. Ratcliffe's trip comes as the Pentagon is reviewing U.S. troop presence in Europe, which could lead to large-scale cuts. Interestingly, the last known Moscow visit by a CIA director was in 2021, when William Burns warned Putin not to attack Ukraine. Russia launched its full-scale invasion of Ukraine in Feb. 2022.
Through the mill: U.S. wheat futures (
W_1:COM) jumped to a three-year high on Wednesday following the report of Russia's possible escalation, adding to concerns that
wheat export flows out of the Black Sea region will be suppressed for the near term. Russia and Ukraine have been targeting each other's commercial ships and ports in the Black Sea area. The two countries account for more than 25% of global wheat exports and the attacks have come in the middle of this year's harvest. "Unless Black Sea and Azov logistics improve, grain will continue to accumulate inside Russia, keeping domestic prices under pressure while reduced Russian availability supports global wheat prices," consulting firm SovEcon wrote in a note.
