Trilateral talks in Abu Dhabi on Ukraine peace

Trilateral negotiations between Ukraine, Russia, and the US began in Abu Dhabi on November 10-11, following a previous round in Geneva on February 16-17. On November 10, the Ukrainian delegation first met with representatives of the UK, France, Germany, Italy, NATO, and the European Commission, joined by Witkoff and Kushner, then moved to a trilateral format. On November 5, Zelensky discussed preparations with Witkoff and Kushner, while technical groups from Ukraine, the US, and Europe, along with NATO representatives, discussed security guarantees for Kyiv in Brussels.

That same day, Melania Trump gathered Arakhamia, Lubinets, Dmitriev, and Russian ombudsman Lantratova at the White House regarding a humanitarian mission in Oleshky; then Dmitriev met with Donald Trump, who announced a “big beautiful deal” affecting Ukraine and all of Europe. Kushner explained that the US discussed security guarantees for Ukraine and a new European security architecture with Ukraine, NATO, and Europeans, proposing the NATO-Russia Council as a model, but Europe said talks with Russia on this could only happen after a ceasefire in Ukraine.

The US offers security guarantees modeled on NATO Articles 4 and 5, but Trump would decide US actions, Europe should bear financial costs, and Russia’s consent is required for activation. Kushner also prioritizes a ceasefire, an economic recovery plan for Ukraine, humanitarian issues, prisoner exchanges, and return of civilians.

According to NYT, ceasefire and territories are not on the agenda, while Lavrov said the first point would be security for Russia, Ukraine, and the region. Russia demands the entire Donetsk region; Ukraine proposes stopping at the current front line, and a US official told Reuters that both sides show flexibility privately. Trump said Ukraine “will get slightly different outlines.”

According to The Economist, US negotiators proposed redrawing administrative borders of Donetsk and Luhansk regions so Russia could declare full control, leaving cities like Sloviansk and Kramatorsk under Kyiv’s control; other ideas include returning Russia to the European energy market, opposed by Ukraine and European countries.

Per FT, Putin demands Ukraine withdraw its forces from remaining Kyiv-controlled Donbas areas as a ceasefire condition and wants to link security guarantees to additional territorial concessions, while Kyiv insists on delimitation along the front line and Zelensky says territorial issues can only be discussed at a leaders’ meeting. The Ukrainian delegation is led by Umerov and includes Budanov, Arakhamia, Kyslytsia, and Skybytskyi; the military track is led by Hnatov and Skybytskyi.

The Russian delegation is led by Medinsky and includes 11 people, among them Ryabkov, Galouzin, GRU chief Kostyukov, and General Staff representative Zhigarlovsky; Ushakov oversees talks from Moscow. The US sent Witkoff and Kushner. Europeans are not participating in the trilateral format; Peskov said talks are proceeding without Europe, while the US, per Politico, is persuading Russia to allow Europeans into the next round. No signing is expected in Abu Dhabi.

The US speaks of a “real chance” for “serious progress,” with the round’s goal to identify divergent positions and prepare future meetings, including with Zelensky and Putin; after Abu Dhabi, Witkoff and Kushner may travel to Moscow. Budanov called for new prisoner exchanges. Per FT, Putin expects no truce and wants to regain advantage through winter strikes on Ukrainian energy infrastructure.

Market Decomposition of Geopolitical Risk Premium

On November 10, 2025, markets began removing the war risk premium from European assets and energy commodities at the opening of Abu Dhabi negotiations. Brent fell below $90/bbl for the first time in months, Dutch TTF broke the 30 €/MWh floor, and Ukrainian GDP warrants, though in technical default, traded at 90.2 cents on the dollar, up about 20% year-to-date. This reaction is asymmetric and nonlinear: it does not merely reprice the underlying (oil, gas) but deforms the implied volatility term structure and decouples sovereign credit spreads from Ukraine’s fiscal fundamentals.

A long-only portfolio manager or a structured products desk now lacks any proprietary model to distinguish a reversible risk-premium shock from a permanent fundamental reassessment of sovereign solvency, or from a liquidity illusion in frontier assets priced by very few counterparties. An institutional allocator asks how much, in basis points of spread and delta of optional premium, each percentage point of peace probability the market prices: without this answer, hedging is overpaid or the convexity leg is missed. The problem solved is twofold: saving time and capital by avoiding in-house construction of event modeling that requires sovereign CDS data, implied volatility surfaces on Brent/TTF, and a flow map of positions on Ukrainian warrants; and increasing risk-adjusted returns by identifying dislocations between the peace premium implicit in gas and that in Ukrainian sovereign credit, and arbitraging them.

Market Scenarios and Quantitative Projections

Our article presents three quantitative market scenarios with estimated probabilities and expected impacts on Brent, TTF, CDS Ukraine, and GDP warrants. Scenario 1, “Cessez-le-feu de façade” (π≈0.35), assumes a ceasefire without territorial settlement, delayed security guarantees, and maintained energy sanctions. Expected impacts: Brent in 78–85 $/b (war premium of 5–7 $/b remains), TTF at 28–32 €/MWh (winter premium gone, transit risk remains), CDS Ukraine tightening 150–250 bp without returning to pre-2022 levels, and GDP warrants at 95–105 cents. Scenario 2, “Paix armée avec garanties” (π≈0.20), includes security guarantees, European military presence, US funding, and redrawn Donbass borders with Slaviansk and Kramatorsk staying Ukrainian. Expected: Brent 70–78 $/b, TTF 22–28 €/MWh (partial Russian gas return, against Kyiv’s wishes), CDS Ukraine 400–600 bp (major compression), GDP warrants 110–125 cents. Scenario 3, “Escalade hivernale” (π≈0.45), involves failed negotiations, renewed Russian strikes on Ukrainian energy infrastructure, new sanctions, and territorial status quo. Expected: Brent 95–110 $/b, TTF 35–45 €/MWh (winter premium with storage shortage risk), CDS Ukraine widening 200–400 bp, GDP warrants 70–80 cents. The Brent projection formula weights scenario prices by risk-neutral probabilities calibrated on 3-month options. Implied volatility is an increasing function of scenario dispersion; therefore, options keep a volatility premium even when spot falls because the market prices a possible reversal (scenario 3).

_{BlackRock Investment Institute: downgrade of the ‘Russia–NATO’ risk rating to medium, with a warning that a ceasefire is possible in the short term but a lasting agreement is difficult.
BIS (Bank for International Settlements): analytical framework for the impact of geopolitical risks on banks (September 2025), which justifies the integration of tail risk scenarios into capital models.
WEF Davos 2025: focus on private sector participation in security guarantees and reconstruction ($800 billion over ten years).
US–Ukraine mining agreement (May 1, 2025): 50/50 reconstruction fund, potential value > $300 billion, which constitutes an underlying asset for economic security guarantees.
Geopolitical risk commoditization theory: war risk becomes a tradable asset class (via options, CDS, warrants), which imposes continuous rather than event-based pricing.}

The window of November 10–11, 2025, in Abu Dhabi is not merely a diplomatic event: it is a repricing shock that reveals a structural inefficiency in the pricing of peace risk. Ukrainian assets and European energy commodities are prime instruments to capture this inefficiency, but they require a quantitative infrastructure that few players possess.

We offer this infrastructure as a service: a PPI index, conditional fair value levels, and a dislocation alert feed. You are not buying a model; you are buying the ability to decide faster and with fewer type I errors (overreacting to a non-credible peace signal) and type II errors (ignoring a fundamental repricing).

Next step: backtest the PPI on the Minsk (2015), Geneva (February 2025), and Abu Dhabi (November 2025) windows, with a risk-adjusted performance measure (Sharpe, drawdown, alert hit ratio).