FIRST TAKE: Russia-Ukraine negotiations amid escalation NEUTRAL for TTF Laurent Ruseckas *Russian and Ukrainian negotiators met June 2 in Istanbul, their second meeting under the new quasi-bilateral format *Initial reports did not suggest any significant progress has been made, but talks will continue *Continuing escalation on both sides makes any deal much less likely, particularly given progressive US disengagement This outcome is NEUTRAL for TTF prices. With the market giving a low probability to a return of Russian gas, the peace process offers only downside: a breakthrough (real or imagined) could push prices down. We did not see a breakthrough today and do not expect one going forward. As neither side wants to be seen as an obstacle to peace, some slightly positive vibes did emerge despite recent escalations in hostilities. Further prisoner exchanges were agreed upon, potentially facilitated by a limited ceasefire. A summit between Presidents Vladimir Putin and Volodymyr Zelensky was also discussed, potentially with President Donald Trump's participation. However, the positions of the two sides on a range of issues remain far apart, while Russia continues to reject a full ceasefire, as proposed by the US and Ukraine. From the Russian perspective, a ceasefire would risk freezing a status quo that the Kremlin considers to be unacceptable. Instead, Russia has stepped up missile and drone attacks inside Ukraine and appears poised to launch a summer offensive. Ukraine has escalated as well, with well-publicized and apparently highly successful drone attacks on June 1 against four airbases deep within Russia, an action that reduces the already low possibility that Russia may soften some of its negotiating demands. As has been the case since February, chances of a peace agreement rest almost entirely on the US exerting maximum pressure on both sides, most importantly on Russia – the side on which the US has much less leverage. There is no sign of this, and we expect the US to continue to back away from focused mediation efforts as first signaled on April 18 rather than dive back in, particularly with Trump's personal involvement. Read on PlattsConnect: https://tinyurl.com/463x392b