"Ukraine has a lot of cards" and is "winning the war," says economic adviser to Zelensky - CNN

Executive Summary

Ukraine's President Zelenskyy arrived at the June 2026 G7 summit in France to argue that Ukraine has improved its military position, particularly through increased drone operations, with G7 leaders commending Ukraine's "resilience and progress on the battlefield in recent months." High-tech Ukrainian drones are pinning down Russian troops, restricting supply lines in occupied regions, and disrupting oil production deep inside Russia that provides vital revenue for Moscow. This tactical momentum masks a deeper strategic puzzle: Zelenskyy stated G7 leaders agreed "that Russia is not winning and they are losing a lot of people, that they have to make a deal as quickly as possible, and they don't have the initiative in their hands," yet Russia has made a net total gain of 1,427 square miles over the past 12 months according to Institute for the Study of War data, representing about 0.6% of Ukraine's total territory. The apparent contradiction, improving Ukrainian battlefield tactics amid slow Russian territorial gains, reveals Ukraine's leverage lies not in imminent victory but in inflicting unsustainable costs on Russia while maintaining Western support ahead of fragile negotiations.

Ukraine's Tactical Gains Within Constrained Boundaries

Ukraine's success in its recent drone strikes can largely be attributed to Kyiv's current drone superiority, with Ukraine stepping up its mid-range strikes after focusing much of its efforts on short-range attacks on Russian positions along the front line and long-range strikes reaching far into Russia itself.

In February 2026 the SBU's Alpha unit stated that its operators in 2025 and early 2026 had neutralized approximately half of Russia's operational Pantsir stockpile, with each system costing $15 to 20 million. This represents genuine military innovation, the systematization of drone-swarm tactics combined with deliberate anti-air-defense operations that European and U.S. analysts recognize as evolving Ukraine's operational approach.

Yet the interplay between drone success and territorial stasis reveals a strategic asymmetry. Ukraine's key trump cards on the battlefield and at the negotiations table are the 15-20 kilometer kill zones created where heavy machinery, tanks, or troops cannot operate without the risk of near instant destruction, making pushing the Ukrainian army back from their positions a key objective for Russia, an outcome that may create significant strategic disadvantage for Ukraine and Europe unless leveraged with security guarantees from international allies. Ukraine's drones defend that kill zone and stretch it deeper into Russia; they do not shrink the territory Russia has won. This distinction is critical because it means Ukraine has found an operational answer to Russian attrition but not to Russian conquest.

The Negotiation Trap: Operational Momentum Versus Diplomatic Reality

Zelenskyy's statements at the G7 summit position Ukraine as gaining ground in a way that frames negotiations differently. Zelenskyy is using the summit to argue that Ukraine's military position has improved, particularly due to increased drone operations and deeper strikes into Russian territory, and Ukraine is attempting to leverage reported battlefield gains to strengthen its negotiating position and secure continued Western backing. The strategy is sound: demonstrate enough operational progress to justify continued Western support while signaling strength at the negotiating table.

The contradiction between tactical progress and territorial stasis, however, creates a credibility risk. President Donald Trump touted a potential peace deal to end Russia's invasion as being "close to 95% done" in December, but two months on the fighting, bombing and killing continue unabated, with the most recent round of negotiations in Geneva described as "difficult," and sources close to the Ukrainian government stating "the [remaining] 5% is the bulk of the substance" and "None of this stuff has been agreed to," with one source adding "Forget about the 5% -- the Russians don't even agree on the 95%."

For Russia, negotiations follow a classic maximum value extraction approach, with Moscow having routinely stuck to its positions not giving an inch, and in its view the best alternative to a negotiated agreement is to keep fighting because Moscow thinks it is winning. This creates a mismatch: Ukraine's drone campaign demonstrates Russia cannot achieve total victory at an acceptable cost; Russia's continued territorial gains and hardline negotiating stance demonstrate Ukraine cannot reverse conquest. The result is moderate-to-high confidence a long stalemate punctuated by negotiation theatrics rather than breakthrough.

Cross-Domain Pressure Compounding Russia's Position

The interplay between military attrition and economic disruption creates a second-order effect beyond the front line. Ukrainian drones are disrupting oil production deep inside Russia that provides vital revenue for Moscow, and high-tech Ukrainian drones are restricting Russian supply lines in occupied regions of Ukraine. This economic pressure translates directly into fiscal constraints on Russian military procurement and force regeneration, which in turn compounds the existing geopolitical pressure Russia faces in negotiations. The broader geopolitical implications include that Russia cannot sustain indefinite territorial occupation while absorbing drone-driven attrition without risking domestic political instability, yet it also cannot abandon territorial gains without undercutting Putin's domestic narrative of special military operation success.

Western Backing: From U.S. Pressure To European Scaffolding

The realignment of Western support away from unilateral U.S. pressure and toward European institutional backing has materially altered Ukraine's negotiating environment. Ukraine's campaign against Russia is starting to bear fruit, with Ukraine killing Russian troops faster than Russia can easily replace them through the use of drones and other technology. Yet the Iran war has distracted Washington from its largely fruitless effort to end the fighting in Ukraine, creating a window for European capitals to reassert agency. G7 leaders promised to strengthen Ukraine's air defenses and ensure its energy supply, as well as step up international economic pressure on Moscow.

This represents a structural shift: Ukraine's leverage no longer depends primarily on convincing Washington to maintain aid levels, but rather on sustaining European commitment and demonstrating that continued Ukrainian military pressure justifies that commitment. Ukraine is short of American-made Patriot air defense missiles in part because of U.S. stocks being depleted by the Middle East conflict, leaving it vulnerable to ballistic missiles, though the G7 statement promised Ukraine more air defense capabilities without specifying type, and G7 leaders said they would consider granting Ukraine licenses for it to manufacture Western weapons, with Kyiv asking for permits to make Patriot missiles itself.

Counterarguments

The Operational Narrative May Overstate Strategic Advantage. Ukrainian drone campaigns create vivid tactical evidence of progress, destroyed refineries, damaged air defenses, that media amplifies and policymakers cite as proof of momentum. DeepState reported that Russian armed forces advanced near or in eight settlements during June 2-9 2026, while Ukrainian forces were not reported to have made advances, contrasting with Russia Matters analysis of ISW data showing Russia lost 10 square miles of Ukrainian territory during the same week. Different measurement methodologies yield different stories; territory remains the lagging indicator that matters most to Russian decision-making.

Western Economic Support May Not Translate Into Battlefield Sustainability. European aid and sanctions may create psychological pressure on Russia, but Ukraine's attacks on Russia's oil production facilities are contributing to a forecasted 0.4 percent growth for this year — a material but limited economic effect. Russia can tolerate low growth; it cannot easily tolerate losing territory. Until drone campaigns materially disrupt Russian military logistics to the point of preventing force generation, the economic pressure remains supplementary to military pressure.

Ukraine's Negotiating Leverage Remains Asymmetrically Constrained. Trump has made repeated suggestions that Zelenskyy and Ukraine are the prime obstacles to any agreement, yet Russian President Putin and his envoys have shown little indication of easing their maximalist demands, with prime demands including that Ukrainian troops withdraw from four partially-occupied territories Moscow claimed to have annexed in September 2022. The framing of negotiations as "nearly done" exerts implicit pressure on Ukraine to concede; Zelenskyy's drone-campaign messaging may inadvertently strengthen Trump's case that Ukraine is "winning enough" to settle now.

Indicators To Watch

Decision Relevance

Scenario A (~50%): Continued Tactical Stalemate With Incremental Russian Gains Ukraine sustains drone operations at current levels; Russia continues 100-150 square mile monthly advances; negotiations remain deadlocked over Donbas and security guarantees through end of 2026. Recommended action: Maintain European aid flow and sanctions enforcement; position Ukraine's improved operational capability as leverage in late-2026 or early-2027 negotiations. Avoid Trump-driven rush toward settlement that locks in territorial losses without security guarantees.

Scenario B (~30%): European-Led Diplomatic Pivot Toward Frozen-Conflict Framework Russia agrees to halt offensive operations in exchange for sanctions relief and recognition of de facto territorial control in Donbas and Crimea; Ukraine retains rest of territory and NATO/EU pathway. Recommended action: Prepare contingency military production plans for Ukrainian defense industry; establish monitoring mechanisms for compliance; ring-fence security guarantee provisions to prevent future Russian escalation.

Scenario C (~20%): Russian Mobilization Breakthrough and Territorial Acceleration Russia announces major conscription push; casualty replacement improves; drone campaign fails to disrupt force generation; territorial gains accelerate to 200+ square miles monthly by Q4 2026. Recommended action: Trigger contingency protocols; accelerate European air defense transfers; prepare for emergency Western arms deliveries; reset negotiating objectives downward to prevent further collapse.

Analytical Limitations

• Casualty figures cited by both Ukraine and Russia remain contested and unverified; independent observer networks (DeepState, ISW) rely on satellite imagery with lag time and limited resolution in contested areas, making real-time casualty assessment impossible. If actual Russian casualties are 30% lower than estimated, force generation pressure is significantly reduced.

• Ukraine's drone production capacity and supply-chain resilience have not been independently audited; Western intelligence on manufacturing bottlenecks and component availability is limited. If drone production falters unexpectedly, tactical momentum reverses within 4-6 weeks.

• Russian economic data (growth forecasts, oil revenue, military spending) is partially sanctions-evaded and relies on incomplete financial reporting. Current 0.4% growth forecast may understate or overstate actual Russian fiscal pressure.

• European commitment to sustained military aid is contingent on domestic political stability across multiple capitals; shifts in French, German, or Polish leadership could alter support levels unpredictably. Current aid commitments reflect 2026 governments, not necessarily 2027.

• U.S. policy toward Ukraine remains dependent on Trump administration's personal preferences and electoral calculations; change of administration or major policy shift could eliminate or reverse support with minimal warning.