Ukrainian President Volodymyr Zelenskiy has frozen a proposed concession to mine Ukraine’s considerable mineral resources worth several trillion dollars after the US side offered little in return, and travelled to the Middle East to reach out for new investors.

Zelenskiy said that the proposed agreement reached with US Treasury Secretary Scott Bessent last week “does not adequately protect the country’s interests” and has not been signed.

US President Donald Trump has demanded access to $500bn of Ukrainian minerals in compensation for US support during the three-year-long war, but has failed to offer security guarantees demanded by Zelenskiy as a key part of any deal.

The Ukrainian leader has been clear that the US minerals deal must encompass not only subsoil resources but also security guarantees and foreign investment in Ukraine, all of which must be legally articulated, and it is becoming increasingly clear that none of his allies are willing to offer a genuine security deal.

Zelenskiy's relationship with Trump got off to a rocky start in the first weeks of the new administration and got considerably worse during the Munich Security Conference (MSC) at the weekend when the US announced Europe is out of the Ukraine ceasefire talks that began in Riyadh on February 18. Special envoy to Ukraine retired Lieutenant General Keith Kellogg said that “of course” Ukraine would be at the table when talks started, but no Ukrainians were present when Russian Foreign Minister Sergei Lavrov kicked off the talks in the the Kingdom of Saudi Arabia (KSA) capital with his counterpart, Secretary of State Marco Rubio.

Kyiv has already promised not to recognise any agreements that will be reached at the meeting. "Ukraine is not participating. Ukraine did not know anything about this. Ukraine regards any negotiations about Ukraine without Ukraine as having no results. We cannot recognise any agreements about us without us. And we will not recognise such agreements," Zelenskiy said before the meeting started.

During the preliminary talks, the Russian and US delegates outlined the scope of the talks that will also include energy and business. Rubio said an agreement could unlock “historic” gains for Russia that would "be good for Russia and good for the world."

The parties have agreed among other things to begin "to engage in identifying the extraordinary opportunities that exist should this conflict [in Ukraine] come to an acceptable end," according to Rubio.

Analysts have speculated that Trump is hoping to cut a larger deal that extends beyond simply bringing the conflict in Ukraine to an end. The Secretary of State said that should the countries come to terms on a Ukraine deal, this would pave the way to "work together on other geopolitical matters of common interest and some pretty unique, potentially historic economic partnerships."

Russia is also heavily involved in the Middle East where it has reportedly just closed a deal with the new Syrian leader Ahmad Hussein al-Sharaa to keep its military bases in that country. Moscow is also close to Tehran, as a fellow sanctioned pariah, and it has also been suggested that Trump hopes to negotiate with the Iran theocracy through Russian President Vladimir Putin.

Looking for new partners

In the meantime, Zelenskiy has been left scrambling to rescue something from his rapidly deteriorating position.

During a working visit to the UAE, Zelenskiy announced the signing of a bilateral trade agreement that will simplify trade between the two countries. According to the Ministry of Economy, this marks the first agreement in Ukraine’s history with a Gulf nation.

"This is a historic event, as it is the first agreement in the most economically advanced region of the Middle East. It covers not only the UAE, but the Gulf regions in general. This is not just an agreement between two countries, it is an entry into the global market, as the UAE is an important economic, trade and financial hub in the Middle East. The implementation of the Agreement, which covers virtually the entire range of bilateral trade, will allow increasing the production and export of Ukrainian products by removing tariff barriers in trade between the two countries," said Minister of Economy of Ukraine Yulia Svyrydenko.

Zelenskiy noted that this significant economic pact, saying it, “liberalises access to the UAE market for nearly all Ukrainian goods.”

He continued by saying that Ukrainian companies will now find it easier to sell their products in the UAE. The agreement facilitates free trade between Ukraine and the UAE and increases access to commodity markets in both countries. Ukrainian goods will enjoy full access to 96.6% of commodity lines in the UAE market.

The Ministry of Economy also mentioned that favourable conditions could help maintain a positive trade balance, which reached $51.5mn in 2023. This agreement could accelerate real GDP growth by 0.1% in the medium to long term.

Zelenskiy is also due to arrive in Riyadh on February 19 but won’t participate in the US-Russian talks. A Ukrainian delegation in Saudi Arabia arrived a few days ago and opened discussions to deepen economic cooperation with nearly 100 local entrepreneurs. They presented these businesses with promising investment opportunities in Ukraine worth $500mn in energy, agriculture, agro-processing, and infrastructure. Collaboration in public-private partnerships and the involvement of Saudi Arabian companies in privatisation were also discussed.

The Minister of Economy, Yulia Svyrydenko said that Saudi Arabia actively supports Ukraine, noting that it has already allocated $500mn for reconstruction.

“Now we can illustrate the call to invest in Ukraine without waiting for the war to conclude, showcasing particular businesses from Saudi Arabia. For instance, FAS Energy invested in renewable energy in Ukraine, and last year, SALIC became a co-owner of one of the largest Ukrainian agro-holdings, MHP, acquiring 12.6% of the company’s shares,” she added. According to the minister, exports to Saudi Arabia rose from $291mn in 2023 to $368mn in 2024.