What's Next in the Russo-Ukrainian War?

Escalation or Ceasefire? Insights from May 2025 Markets

Doug Crescenzi

29 May 2025 — 6 min read

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TL;DR:

Russo-Ukrainian War trends lean toward escalation, with the Russian Military Offensive Index at 32.2% and Ceasefire Index at 19.7%.
Escalating conflict could disrupt energy and grain markets, impacting global supply chains and currency stability.
AI development shows cautious progress, with a 16.5% chance an AI model scores ≥90% on FrontierMath by 2025.
ARC-AGI-2 markets signal near-term AI milestones, with 26% odds of ≥30% by June 30, offering early signals.

Market Snapshots

Event Breakdown

What's next in the Russo-Ukrainian War?: This week, the focus turns to the evolving dynamics of the Russo-Ukrainian War, as captured through thirteen key prediction markets and two newly constructed indices: the Russian Military Offensive Index and the Russian x Ukraine Ceasefire Index.

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These indices, built from weighted prediction market data, offer a directional pulse on whether the conflict is trending toward escalated violence or a potential ceasefire. The markets encompass forecasts on Russian military offensives targeting territories like Pokrovsk, Kupiansk, Yunakivka, Kostyantynivka, and Siversk, alongside four markets gauging ceasefire likelihoods for June, July, October, or before year-end 2025. Weighted by time horizon—prioritizing near-term events—and market liquidity/volume, these indices distill complex signals into actionable insights.

The Russian Military Offensive Index, reflecting the aggregated probability of offensive actions, suggests a 32.2% likelihood, with individual markets showing varied trajectories. For instance, the odds of capturing Pokrovsk by August 31 stand at 34%, while Kupiansk’s prospects by August 31 hover around 28%. This uptick, particularly evident in recent weeks, hints at intensified military pressure, potentially driven by strategic repositioning or resource allocation. Conversely, the Russian x Ukraine Ceasefire Index, at 19.7%, indicates the likelihood of a ceasefire. The interplay between these indices—rising offensive probabilities alongside falling ceasefire odds—paints a picture of a conflict leaning toward escalation as of the time of this writing (May 29th, 2025).

The real-world implications are significant. A rising Military Offensive Index could signal increased territorial ambitions, straining Ukraine’s defenses and prompting NATO to bolster support, potentially escalating geopolitical tensions. Economically, this might disrupt global supply chains, particularly for energy and grain markets, as Ukraine’s agricultural output faces further uncertainty. Macro traders could leverage these signals to hedge commodity prices or currency fluctuations, such as a weakening Ukrainian hryvnia or volatile European gas prices. Policymakers might use this data to adjust sanctions or military aid, while journalists can frame narratives around shifting war dynamics, grounding speculation in market-driven probabilities.

On the flip side, a strengthening Ceasefire Index would suggest diplomatic breakthroughs, possibly tied to international mediation or economic pressures on Russia. A ceasefire by October at 28.5% could ease energy market volatility going into the winter and stabilize Eastern European economies, offering traders opportunities in forex or bond markets. For policymakers, this might open doors to reconstruction funding or peace negotiations, while journalists could highlight emerging peace signals.

The current divergence—higher offensive odds versus lower ceasefire likelihoods—suggests a near-term focus on conflict, with long-term peace prospects dimming, a trend macro actors must monitor closely. The following chart maps out the relationships between the offensive (red) and ceasefire markets (yellow) making clear the trending divergence:

The value of prediction markets lies in their ability to aggregate diverse, real-time insights from informed participants, offering a probabilistic lens beyond traditional analysis. Unlike polls or expert opinions, these markets reflect financial stakes, aligning incentives with accuracy. For the Russo-Ukrainian War, they quantify uncertainty—e.g., 32% odds of Kostyantynivka’s capture by August 31 versus 9.5% for a July ceasefire—allowing traders to position bets on specific outcomes. As news unfolds—military movements, diplomatic talks—these markets will evolve, with indices adjusting in real-time. Tracking them provides a quantitative edge, turning war’s chaos into tradable information for those ready to act.

This probabilistic approach empowers stakeholders to navigate the Russo-Ukrainian War’s complexities. Whether it’s a trader positioning for a Pokrovsk offensive this summer at X34%, a policymaker planning aid based on Siversk odds at 27%, or a journalist contextualizing ceasefire hopes by year end at X40.5%, these markets and indices offer a window into the conflict’s trajectory. As 2025 progresses, their movements will shape economic, political, and informational landscapes, making them valuable tools for understanding what’s next.

Related markets & forecasts:

Long-Tail Radar

This week’s Long-tail Radar spotlights the market “AI model scores ≥ 90% on FrontierMath Benchmark in 2025?” with a current volume of $37,524, offering a niche yet intriguing lens into AI development. This long-tail market, tracking the probability of a breakthrough in mathematical reasoning, stands at 16.5%, reflecting cautious optimism as of late May 2025. Its visualization reveals a steady trend with minor fluctuations, suggesting gradual trader interest in a high-bar achievement.

Paired with this are three higher-volume ARC-AGI-2 markets—“Will any AI score ≥20% on ARC-AGI-2 by June 30?” (volume $105,307), “Will any AI score ≥30% on ARC-AGI-2 by June 30?” (volume $534), and “Will any AI score ≥85% on ARC-AGI-2 by November 3?” (volume $101,088)—collectively totaling $226,416. These markets, with probabilities at 11%, 26%, and 22% respectively, track earlier and more achievable AI milestones on a different benchmark.

The relationship between the FrontierMath market and ARC-AGI-2 markets is compelling. The FrontierMath market’s lower liquidity contrasts with the ARC-AGI-2 markets’ higher volume, yet its focus on a 90% threshold could serve as an early signal for broader AI progress. A rise in the FrontierMath odds might foreshadow advancements that also boost ARC-AGI-2 probabilities, especially as both benchmarks test reasoning capabilities. For instance, if FrontierMath odds climb, it could indicate a leap in model training that also closes the gap toward the 85% ARC-AGI-2 target, offering traders a leading indicator. The combined chart shows this interplay, with FrontierMath’s steady 16.5% tracking below ARC-AGI-2’s more volatile 11% to 26% range, hinting at a potential correlation as AI research accelerates.

These markets are meaningful for traders and forecasters seeking early signals. A surge in FrontierMath odds could suggest a breakthrough model, impacting related markets like “Will OpenAI release an open-source model in 2025?” or “Will ChatGPT reach 1b monthly active users in 2025?” from last week’s newsletter. The ARC-AGI-2 markets, with their higher liquidity, provide a near-term pulse, while FrontierMath’s long-tail nature offers a speculative view. As AI news—training breakthroughs or benchmark updates—unfolds, tracking these markets could reveal shifts, turning niche bets into profitable insights for those positioned early.

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