No one wants to mention the “D” word. Most of the coverage of the war in Ukraine is reporting on calls for more support or increased commitment, trying to rally Republican senators to the Ukraine flag or fend off Russian President Vladimir Putin’s supporters in the EU. But it’s becoming increasingly difficult to pretend that Ukraine is not losing and getting closer to being defeated in the war with Russia.

The tone of the conversation has changed as the attacks get more devastating. In November Ukraine’s top general Andrey Zaluzhnyi caused a scandal by saying the fighting had reached a stalemate in an interview with The Economist, earning him a tongue lashing from Ukrainian President Volodymyr Zelenskiy and later his job.

In December, US President Joe Biden notably switched his support for Ukraine rhetoric from “as long as it takes” that has been the Western mantra since day one, to “as long as we can.” And after the US ran out of money for Ukraine entirely in January and halted delivering virtually all aid, the picture has become even bleaker.

Already in November, a US military assessment as the financial aid already began to dry up last summer, said that Ukraine would run out of long-range missile in the first month of this year, then air defence missiles in February or March, and will run out of the crucial artillery shell by the summer. The first two of those predictions have already come to pass as Ukraine’s ammo crisis gets rapidly worse.

Russia has been playing on the failure by the West to supply Ukraine. It launched a fresh barrage of missiles in January, designed to deplete Ukraine’s stocks of missiles, and intensified the barrage in March as those stocks started to fail.

Increasingly Ukraine’s skies are wide open and Russia at liberty to target Ukraine’s power infrastructure with impunity. Due to Russian attacks, Ukraine lost 7 GW of power generation in a month. “This is a gigantic volume of generation,” Energy Minister Herman Galushchenko said during a trip to Brussels for an informal meeting of EU energy ministers this month. Two of Ukraine’s biggest power stations – Trypilska TPP that supplies Kyiv was completely obliterated and Ukraine’s biggest hydropower station, Zaporizhzhia's Dnipro HPP was put out of action for the rest of this year – as Russia devastates Ukraine’s energy sector.

The effects of the war are becoming catastrophic, beyond the mere death and destruction of the first  year of fighting. As bne IntelliNews reported, Ukraine's birth rate has plummeted to a 300-year low as country’s population collapses to 29mn souls – a bit more than half of what it was in 1991.

Ukraine’s new Commander-in-Chief Oleksandr Syrskyi said on April 13 that the front-line situation had "significantly deteriorated in recent days," as Russian troops gradually advance towards Chasiv Yar.

Now a few souls are starting to bring up the “D” word as a defeat is really looming unless something changes soon.

CIA Director William Burns delivered a warning message to lawmakers in Washington ahead of the mooted vote on a new aid bill, saying Ukraine could lose war by end of 2024 without more aid.

“This is really a question of whether or not our adversaries understand our reliability and determination, and whether our allies and partners understand that as well,” he said.

Facing facts There has been a mass of diplomatic activity to try and shore up support for Ukraine but most of it is going nowhere. And a Trump presidency is looming large on the not too distant horizon, who said we would “end the war in a day” by the simple ruse of pulling all US support for Ukraine, and possibly Nato too.

Nato Secretary General Jens Stoltenberg suggested in April that Nato members should get a permenant $100bn Ukraine support fund together to lock in support. But that idea went down like a lead balloon.

An EU initiative championed by EU foreign policy chief Josep Borrell to deliver one million shells to Ukraine by March also failed when less than 200,000 arrived.

That was followed by a Czech initiative to acquire one million shells from outside the EU, but that to has not resulted in any deliveries of new munitions.

Zelenskiy openly admitted that without US support things look grim.

Quote The EU has been left to scrap together what it can but Zelenskiy said recently that the shell exchange ratio has gone from 1-5 last year to 1-10 this month.

The lack of materiel should come as no surprise to anyone. bne IntelliNews has been reporting Ukraine’s problem of running out of ammunition since January last year and the EU’s failure to invest into the military procurement contracts needed for European defence companies to gear up to produce more ammunition means that EU could not supply Ukraine on its own even if it wanted to. Europe’s own stockpiles are running dangerously low as support remains half hearted.

Europe remains terrified of provoking Russia into a wider European war. German Chancellor Olaf Scholz has repeatedly refused to send its powerful Taurus cruise missiles that could be a game changer, and not only will Berlin never supply these missiles that can strike deep into Russia, their maker, MBDA Deutschland GmbH and Saab Bofors Dynamics, has just announced it will discontinue production because of “the lack of government orders.” And the Western allies are becoming increasingly divided over what to do next. A G7 meeting on April 18 in the Italian resort of Apulia failed to agree on a mechanism for transferring the Russian Federation’s frozen assets to Ukraine. The US has been aggressively pushing the EU to seize the $260bn of frozen Russian reserves, whereas Europe is relentlessly refusing to even contemplate the idea.

At the same time, Western sanctions strategies are diverging. Previously closely coordinated, as the sanctions effort has run it course that coordination is breaking down. There is little that is new in the EU’s fourteenth sanctions package that is being debated now. However, since December the US Office of Foreign Assets Control (OFAC) has been introducing smart sanctions that appear to be having more affect, but the EU is not participating in these efforts, such as the US sanctions targeting Russia’s LNG production.

Much has been written about what “must be done” or “should be done” or “is planned” as the calls to help Ukraine are constant, but the fact of the matter is Ukraine has now been cut off from US aid completely for almost four months and that is showing on the increasingly grim news from the battlefield. bne IntelliNews staff in Ukraine report the sense of pessimism is growing as the hope the US will intervene is failing.

Kremlin open to restarting talks The Kremlin has been following through on its advantage by keeping the military pressure up on the Armed Forces of Ukraine (AFU) and is making small but steady gains in addition to the missile campaign against the power sector.

However, smelling that victory is close, the Kremlin has also been signalling that it may be willing to restart ceasefire talks based on the Istanbul peace deal reached in April 2022 a month after the war began.

“We are ready for constructive work, but we wouldn’t accept any attempts to enforce a position that isn’t based on the realities,” Putin said during a meeting in Moscow with Belarusian President Alexander Lukashenko, adding that the Istanbul draft document could serve as a basis for negotiations. “We can work with it,” he said.

“There have been many changes since then, new entities have been included in our constitution,” presidential spokesman Dmitry Peskov said in a conference call with reporters. So far, Ukrainian officials say they have not faced pressure from Western allies to negotiate with Russia, AP reports.

The offer to negotiate on Ukraine is "not just for show," Russian Foreign Minister Sergey Lavrov said in an interview on April 19, “but talks with Vladimir Zelenskiy are off the table, as they would lead nowhere,” he added.

Belarus President Alexander Lukashenko has offered to mediate again, who participated in the Istanbul talks and also in two rounds of talks following the annexation of the Crimea in 2014 that resulted in the Minsk Protocols. Speculation as two what Lukashenko and Putin are up to is swirling after Lukashenko met Putin in Moscow last week for long talks.

While the Istanbul deal remains controversial, the evidence that an agreement was reached and that both Russia and Ukraine were willing to make significant concessions is now overwhelming.

But any deal will be very unpalatable for Ukraine as it will also certainly mean significant territorial concessions. Zelenskiy has painted himself into a corner by insisting any deal return Ukraine to its 1991 borders and refusing to talk to the Russians (and Putin not at all) until all of Russia’s forces has left his country.

The Istanbul deal also called for a reduction in the size of Ukraine’s military to 85,000, the Russian demand, or 250,000 servicemen, Ukraine’s position. And Ukraine would have to give up its Nato ambitions, but that is a point Kyiv already conceded even before the Istanbul talks began.

But land concessions were always part of the plan for Ukraine’s Western backers. A Ukrainian victory was never a Western war goal. The Department of State has said repeatedly that it would provide support for Ukraine to “put it into the best possible negotiating position” for when talks inevitably start.

The failure of last summer’s Ukrainian counteroffensive to have any impact has changed the Western calculus as its now painfully clear the AFU cannot improve its position and is actually fighting a rear-guard action. If the plan was always to concede some territory then now is an obvious time to start talks, before Ukraine concedes any more.

Russia will never leave the Crimea, which all Russian regard as Russia’s sovereign territory since the 16^th century, and leaving the newly conquered four regions in Ukraine East or the Donbas is also extremely unlikely.

Any “peace talks” with Russia that is not a result of a completely victory by Ukraine will be tantamount to a capitulation to legitimise Russia’s control over these new territories. Moscow has repeatedly said it is open to talks, but that these must recognise the "new realities on the ground".

From this perspective the Istanbul deal doesn’t look so bad; Russia had not annexed the four regions at that time and was prepared to allow the Donbas to remain Ukrainian albeit an autonomous region within Ukraine’s borders. In reality a ceasefire deal would have to include a lot of fudges over the sovereignty of the captured territory.

And Moscow does seem to be in the mood for talks. Ukraine and Russia negotiated for two months on a deal to ensure the safety of merchant shipping in the Black Sea and reached agreement on a text in March, but Kyiv pulled out of the talks "at the last minute," Reuters reported on April 16.

The text of the draft agreement, a copy of which was seen by Reuters, said that Ukraine and Russia would reportedly provide security guarantees to merchant ships in the Black Sea, pledging not to strike, seize, or search them if they are either empty or had declared non-military cargo. Reuters’ sources said they did not know the reasons for Ukraine's decision to drop the deal.

The Istanbul deal had three main elements: land, military size and neutrality, plus vague add-ons to do with “de-nazification.” The last point has already been agreed, and the negotiations over the size of Ukraine’s army can be negotiated. The really hard point is land, but even in Istanbul they agreed that the status of the Crimea and the Donbas would be dealt with separately at face-to-face talks between Putin and Zelenskiy.

“It seems clear that no Ukrainian government would officially cede these territories to Russia. It seems highly improbable that a majority of Ukrainians would vote for such a referendum, and the backlash from heavily armed ultra­nationalist forces would be ferocious. The only answer therefore is the one pursued in Cyprus over the past half century: to leave the territorial issue for future negotiation, while both sides promise not to change the armistice line through force,” a paper on the war published in February by the Quincy Institute for Responsible Statecraft said.

The shaped of some deal with Russia could come up as soon as June 15 when Switzerland is due to host a Ukraine peace summit and will host more than 50 countries in the Bürgenstock resort near Lucerne, although Russia has not been invited. Some major players like China, India and the Kingdom of Saudi Arabia (KSA), which hold sway over Russia, have been invited and so some sort of ceasefire framework could be worked out.