President Vladimir Putin will fight on in Ukraine unless the West agrees to Moscow’s peace terms, three sources familiar with Kremlin thinking told Reuters on July 15.

Putin was unimpressed by US President Donald Trump’s “big announcement” on July 14 where he promised lots of new weapons, including the crucial Patriot missile air defence systems, and harsh 100% second sanctions tariffs on any country doing business with Russia if a ceasefire deal is not signed in 50 days.

Not only will Putin not back down, but he will take more Ukrainian territory, the sources said. The Kremlin already warned during the last Istanbul meeting on June 3 that it might take as many as eight new regions if Ukraine does not accept its terms.

"Putin thinks no one has seriously engaged with him on the details of peace in Ukraine – including the Americans – so he will continue until he gets what he wants," one of Reuters sources said, speaking on condition of anonymity.

The ceasefire talks that kicked off in Riyadh on February 18 have now collapsed and are currently dead in the water. Following Putin’s last “no progress” phone call at  the start of July, Putin launched a devastating missile barrage on Ukraine that has only escalated since then as a missile war gets under way. Putin has clearly given up on any hope of reaching a negotiated solution to  the conflict for the meantime.

Trump too is frustrated and given up on doing a peace deal for the meantime. In the run up to his big announcement, he said that he was “disappointed” with Putin, that he had tried to make a deal four-times that went nowhere, and has made some of the most pro-Ukraine, anti-Russia comments since he took office. Until this week, Trump has been extremely soft on Russia as the White House has made it clear it is also interested in doing business with Russia. It seems Trump has also given up on that hope for the meantime.

Despite multiple phone calls between Trump and Putin and visits to Moscow by US special envoy Steve Witkoff, Putin has remained unmovable and is insisting on a set of concessions, based on the 2022 Istanbul peace deal, that include a promise by Ukraine never to join Nato, recognition of Russia’s sovereignty over the five regions it occupies, and a significant reduction in the Armed Forces of Ukraine (AFU) after the war, the Reuters source confirmed. Ukrainian President Volodymyr Zelenskiy has rejected all these terms and made a counteroffer in April calling for an immediate unconditional 30-day ceasefire after which negotiations on terms could begin.

“Putin values the relationship with Trump and had good discussions with Witkoff, but the interests of Russia come above all else,” the Reuters source said.

The source added that Putin has signalled willingness to discuss international security guarantees for Ukraine, though the structure of such a deal remains unclear.

“Russia will act based on Ukraine’s weakness,” a third source told Reuters, warning that if Kyiv’s defences collapse, Moscow may expand its objectives to include full control of Dnipropetrovsk, Sumy, and Kharkiv regions. “But if it falls, there will be an even greater conquest.”

Russia has advanced some 1,415 square km in the last three months, according to open-source data from DeepStateMap. It currently controls nearly 20% of Ukraine’s territory, including Crimea and all of  the Luhansk region, and parts of Donetsk, Zaporizhzhia, and Kherson. Putin maintains that these territories are now part of Russia and insists that Kyiv must withdraw before peace talks can begin – another point of contention with Bankova (Ukraine’s equivalent of the Kremlin).

“Appetite comes with eating,” the first source said, noting that territorial ambitions could widen further as Russian forces gain ground. In a similar conversation with Reuters sources in November, Putin hinted that there was some limited wiggle room over where the borders of the regions would be drawn if a serious ceasefire deal was being negotiated.

Despite Western sanctions and rising costs, Russia’s $2 trillion economy has proved resilient, although as the war goes into its fourth year, the budget is showing increasing signs of stress and this year’s federal budget deficit has already trebled to the still modest 1.7% of GDP.  Economic growth is projected to slow to 2.5% in 2025 from 4.3% in the last two years, according to the Russian economic ministry. Two of the sources claimed Russia now outpaces Nato in munitions production, particularly artillery shells,  a fact confirmed by European Commission President Ursula von der Leyen in her ReArm speech earlier this year.

A second source dismissed the threat of US tariffs on nations buying Russian oil, saying “Trump has little leverage” and Moscow would continue selling crude globally. “Putin understands that Trump is an unpredictable person who may do unpleasant things, but he is manoeuvring to avoid irritating him too much,” the source said.

Analysts are now expecting an extended summer campaign by the Armed Forces of Russia (AFR), as it takes full advantage of its superiority in missiles and Ukraine’s rapidly diminishing supply of Patriot air defence ammo. Looking ahead, the sources expect a continued escalation, with one warning that tensions between the US and Russia—both nuclear powers—pose growing risks. “The war will continue,” the source concluded.