A temporary U.S.-Iran ceasefire sparked a broad relief rally across assets on Wednesday, but experts warned that any deal concerning lasting peace will be complicated by a major trust deficit.

The ceasefire came following hastened diplomatic efforts led by Pakistan and just hours before Trump’s threatened deadline for wiping out the entire Iranian civilization, briefly pulling the region back from the brink of a massive military bombardment.

Oil prices cooled to below $100 per barrel following the ceasefire announcement, but remain far above the pre-war levels of around $70 per barrel.

While U.S. President Donald Trump said the two-week ceasefire was contingent on the “complete, immediate, and safe opening” of the Strait of Hormuz, Iranian officials stated that safe passage through the strait would be “possible,” subject to coordination with its armed forces and “technical limitations” — caveats that may give Iran some room to define compliance on its own terms.

“This is a problem that could derail the ceasefire later this year,” said Matt Gertken, chief geopolitical strategist at BCA Research, warning that the coordination requirement remains a risky ambiguity in both sides’ statements so far.

Trump may temporarily accept Iran as a gatekeeper — with U.S. midterm elections approaching and gasoline prices sharply higher than before the war — but after the election, the U.S. national security establishment will start to demand a more permanent solution,” said Gertken. “Fighting will ignite later this year, if not later this month.”

Tehran also said that its armed forces will cease defensive operations if attacks against Iran are halted. After the ceasefire came into effect at 8 p.m. ET Tuesday, missiles were still launched from Iran towards Israel and several Gulf states.

The reprieve on Tuesday would allow some time for the two sides to reach a longer agreement to end the six-week-old war, which has killed thousands of people and sparked a global energy crisis, with their delegations expected to meet in Islamabad on Friday.

Iran is reportedly finalizing a joint maritime protocol with Oman to institutionalize coordinated management of tanker traffic through the strait, which could embed Iranian authority over the crucial energy artery into a standing bilateral agreement.

Israel agreed to suspend strikes but urged Washington to press for deeper Iranian concessions, including the surrender of enriched uranium stockpiles. In its 10-point terms, Iran requested Washington to accept its uranium enrichment program and the lifting of all sanctions.

The ceasefire will likely hold in the near term, given the economic costs accruing to the global economy from six weeks of conflict, said Michael Langham, emerging markets economist at Aberdeen Investments. “Parties with vested interest in stopping the conflict and reopening the strait will double down on efforts to find a compromise,” he said.

If the truce holds and the strait reopens, the global economic damage should prove manageable, Langham added. Central banks could broadly resume their pre-conflict paths — and attention may shift from inflation to growth, if commodity prices normalize quickly, he added.

The ceasefire sparked a relief rally in markets amid repricing for a de-escalation in the conflict, but investors will watch for something more durable than a two-week pause, Geoff Yu, senior market strategist at BNY, said on CNBC’s “Squawk Box Asia” on Wednesday.

“What the market is going to start pricing ahead is a first step towards further de-escalation and perhaps something more permanent,” he said, flagging that the disruption has extended beyond crude oil to commodities such as helium, critical to semiconductor manufacturers in South Korea and Taiwan.

U.S. President Donald Trump on Thursday threatened to destroy Iran’s bridges and power plants, saying the “New Regime leadership knows what has to be done, and has to be done, FAST!” in a Truth Social post.

Trump did not elaborate on what needed to be “done,” but said the U.S. “hasn’t even started destroying what’s left in Iran.”

Hours later, Iran’s semi-official Tasnim news agency reportedly claimed that a U.S. F-35 fighter jet was shot down over central Iran. Images of the jet were posted on Telegram, with one photo that appeared to show the words “U.S. Air Forces in Europe” on what appeared to be the tail section of a plane.

The U.S. Central Command, which oversees the region, and Iranian authorities did not respond to a request for comment at the time of publication.

Trump’s latest threat came a day after a nationwide address in which he said the U.S. military would hit Iran “extremely hard” for the next two or three weeks. He added that the U.S. would “bring them back to the Stone Ages where they belong.”

Hours after his speech, Iranian Foreign Minister Abbas Araghchi struck a defiant tone on X, saying that “there was no oil or gas being pumped in the Middle East back then,” referring to Trump’s stone age remarks.

“Are POTUS and Americans who put him in office sure that they want to turn back the clock?” Araghchi said.

Iran has effectively shut tanker traffic through the Strait of Hormuz, a vital global oil route, after the U.S. and Israel attacked the country on Feb. 28.

Trump has repeatedly threatened to send Iran back to the “stone age” as the war entered its second month and the U.S. military build-up in the Middle East showed no signs of slowing.

Despite reports of overtures from the U.S., including ceasefires and a 15-point peace plan to end the war, Iran has publicly contradicted multiple reports about negotiations with the Trump administration on numerous occasions.

Tehran had described the 15-point proposal as “extremely maximalist and unreasonable,” according to an Al Jazeera report on March 25, citing a high-ranking diplomatic source.

Trump said Wednesday that Iran’s “New Regime President” had asked Washington for a ceasefire, a claim that Tehran has denied. Trump has not specified who the “President” is.

“We will consider when Hormuz Strait is open, free, and clear. Until then, we are blasting Iran into oblivion or, as they say, back to the Stone Ages!!!,” he wrote.

Attacks on power plants could constitute a war crime and violate international law, legal experts said.

In a letter dated Thursday and signed by over 100 law experts, the group said international law prohibits attacks on “objects indispensable to the survival of civilians, and the attacks threatened by Trump, if implemented, could entail war crimes.”

Trump had also earlier said that he could target water desalination plants in Iran.

The Gulf Cooperation Council on Thursday called on the United Nations Security Council to take “all necessary measures to ensure the immediate cessation of Iranian aggressions against the Council states.”

The six countries in the Gulf Cooperation Council — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates — have come under attack from Iranian missiles and drones as the war entered its second month.

The Kuwait Petroleum Corporation said that its Mina al-Ahmadi refinery was hit by drones early on Friday.

Jassim Albudaiwi, Secretary-General of the Gulf Cooperation Council, said that while the bloc does not seek war, Iran had “exceeded all red lines” and described Tehran’s attacks as “treacherous.”

Bahrain, the current rotating president of the Security Council, has led an effort to pass a U.N. resolution to ​authorize “all necessary means” to protect commercial shipping in and around the Strait of Hormuz.

But the proposal reportedly stalled after veto-wielding Security Council members China, Russia and France objected to the draft resolution, which would have authorized military action against Iran.

Hello, this is Holly Ellyatt writing to you from London. Welcome to another edition of CNBC’s Daily Open.

Global markets will be on tenterhooks today after the White House said that U.S. President Donald Trump will deliver an address “to the nation to provide an important update on Iran” late on Wednesday evening.

The U.S. and Israel’s military operation against Iran is just over a month old but there’s a clear sense that war fatigue could be creeping in at the top, with Trump reportedly telling aides that he was willing to end the war without reopening the Strait of Hormuz.

Speaking of which, the president on Tuesday again lambasted European allies for not getting involved in the U.S.’ war, telling the U.K. and France to “Go get your own oil” from the Iran-blocked maritime passage.

Pace yourselves if you want to listen in to President Trump’s address on Wednesday giving an update on the Iran war — it’s set to take place at 9 p.m. ET — that’s 2 a.m. on Thursday London time.

“We leave because there’s no reason for us to do this,” Trump told reporters at the White House. “We’ll be ‌leaving very soon.” He also seemed to dismiss the idea of having to reach a negotiated settlement to end the war, signaling that the U.S. could just declare victory and end hostilities.

Global markets certainly like the idea of the war ending sooner rather than later: Asia-Pacific markets rebounded overnight while European bourses look set to rally at the open on Wednesday. U.S. stock futures also ticked higher on hopes that Trump is looking for an off-ramp to the war, which has sent global energy prices rocketing. Crude oil prices once again extended gains overnight.

We’ll have to wait and see what the president says later, but he’ll be mindful that this war has never had much support from U.S. voters and the majority want him to focus on domestic matters — ‘America First,’ remember?

Speaking of voting, the president signed an executive order on Tuesday cracking down on mail-in voting ahead of the 2026 midterm elections in November. The move did not go down well with voting-rights advocates, who warned it could disenfranchise millions of Americans.

It’s April Fool’s Day, so watch out for any news that seems too outlandish – I know, it’s getting harder these days.

— Holly Ellyatt

Oracle cutting thousands in latest layoff round as company continues to ramp AI spending

Israel’s Defense Forces said Wednesday that Iran’s Intelligence Minister Esmail Khatib had been killed in a “targeted strike” in Tehran, marking the third assassination of a high-ranking official in just two days.

“Khatib played a significant role during the recent protests throughout Iran, including the arrest & killing of protestors and led terrorist activities against Israelis & Americans around the world,” the IDF said in a post on social media.

“Similarly, he operated against Iranian citizens during the Mahsa Amini protests (2022–2023),” they added.

Iran has not yet commented on reports of Khatib’s death.

It comes after Israel said Tuesday that Iran’s top security official Ali Larijani and the commander of Iran’s Basij forces, Gholamreza Soleimani, had both been killed. Iran’s official judiciary news agency later confirmed the killing of Soleimani, the Associated Press reported.

According to AP, Iran’s Supreme National Security Council released a statement confirming Larijani was killed “along with his son Morteza Larijani and the head of his office, Alireza Bayat, as well as several guards.”

The IDF said Khatib was appointed to his position in 2021 by Iran’s late supreme leader, Ayatollah Ali Khamenei, who was killed in strikes aimed at high-ranking Iranian officials at the beginning of the war on Feb. 28.

Iran has since retaliated by attacking its Gulf neighbors and targeting ships trying to pass through the strategically vital Strait of Hormuz.

The U.S. and Israeli-led war against Iran entered its 19th day on Wednesday, with Israel launching a series of strikes on Lebanon’s capital of Beirut as it continues its offensive against Tehran-backed militant group Hezbollah.

Iran and its allied military groups have launched a series of retaliatory strikes across the Middle East, amplifying fears of a sprawling regional crisis.

President Donald Trump on Monday said he thinks he will have the “honor” of “taking Cuba,” speaking during an executive order signing at the White House.

“Whether I free it, take it, I think I can do anything I want with it,” Trump told reporters in the Oval Office with Vice President JD Vance standing behind him. “They’re a very weakened nation right now.”

The president’s comments on taking Cuba come as he carries out a war in Iran that is stretching into its third week. Trump has encouraged the people of Iran to depose their government in that conflict, one of a litany of reasons he has given for starting the war.

Trump recently suggested he will turn his sights to Cuba after the U.S. achieves its aims in Iran. He has threatened a “friendly takeover” of the Caribbean nation, which has been an adversary of the U.S. for decades except for a brief thaw when Barack Obama was president.

The Cuba threats are the latest example of Trump’s more aggressive foreign policy during his second term in the White House. In addition to the war in Iran, Trump ordered a military operation that captured the Venezuelan leader Nicolás Maduro and has made repeated overtures to acquire Greenland, the Arctic island territory of Denmark. Denmark has repeatedly said Greenland is not for sale.

The White House has effectively blockaded Havana from Venezuelan oil after Maduro’s capture. That has caused an energy and economic crisis in the island country.

Cuba confirmed it was speaking with the Trump administration about a potential solution last week. Trump also confirmed the talks on Monday.

“I can tell you that they’re talking to us; it’s a failed nation, they have no oil, they have no nothing,” Trump said. “They have nice land.”

U.S. President Donald Trump said his planned trip to China later this month could be delayed as Washington sought to pressure Beijing to help reopen the Strait of Hormuz, underscoring a renewed flashpoint in an already fragile bilateral relationship.

In an interview with the Financial Times on Sunday, Trump said he expected China to help unblock the strait before he travels to Beijing for a summit with Chinese leader Xi Jinping, which had been scheduled for March 31 to April 2.

Trump added that the two weeks to the meeting were a “long time” and that Washington wanted clarity before then. “We may delay,” Trump told the FT, without elaborating on timing.

The remarks came as Treasury Secretary Scott Bessent met his Chinese counterpart He Lifeng in Paris for talks about the planned summit. Beijing has yet to confirm the dates and typically announces such plans closer to their scheduled start.

The visit would be the first for a U.S. president since Trump’s last trip during his first term in 2017. It also comes five months after the two leaders met in the South Korean city of Busan, where they agreed to a one-year truce in a trade war that had seen tit-for-tat tariffs briefly soar to triple-digit levels last year.

Chinese top diplomat Wang Yi said earlier this month that the agenda for the exchange was already “on the table.”

Trump said Sunday aboard Air Force One that China sourced about 90% of its oil through the strait, framing Beijing’s cooperation on Hormuz as a matter of self-interest. The president has appealed to several European and Asian countries, including China, to help open up the chokepoint through which roughly one-fifth of the world’s daily oil supply passes.

However, the numbers suggest Beijing may be more insulated from the closure than Trump’s comments implied.

China has spent the past two decades diversifying its energy sources and building strategic reserves to cushion the blow of any prolonged disruption.

Seaborne oil imports through the strait now account for less than half of China’s total oil shipments, according to Rush Doshi, director of the China Strategy Initiative at the Council on Foreign Relations. Nomura also estimated that oil flows through Hormuz represent just 6.6% of China’s total energy consumption.

Satellite imagery tracked by maritime research firms showed that Iran has continued to ship large amounts of crude oil to China since the war broke out late last month.

Both sides appeared to increase pressure ahead of the high-stakes summit in Beijing. The U.S. launched trade investigations into a broad swath of countries over alleged excess capacity and failures to address forced labour.

In a statement Monday, China’s commerce ministry said the Trump administration had “once again abused the Section 301 investigation process to override domestic law over international rules,” calling the probes “extremely unilateral, arbitrary and discriminatory.”

Beijing said it had formally lodged representations with Washington against the investigations. “We urge the U.S. side to immediately correct its wrong practices and meet China halfway,” a ministry spokesperson said, calling for dialogue and negotiated solutions.

The ministry said it would monitor the progress of the investigations closely and take unspecified measures to defend China’s interests.

— CNBC’s Evelyn Cheng contributed to this report.

The U.S.-Israeli war on Iran is a “misadventure” whose goals and exit strategy remain unclear, Russia’s ambassador to the U.K. told CNBC.

Andrey Kelin said Russia has “a lot of sympathy” with Tehran and said “the best end” to the escalating Middle East war is for it to “show only that they are senseless.”

“We still are trying to understand, what are the goals of President Trump in this campaign. You know that lots of doubts have been expressed about the exit strategy that the American administration can have in this endeavour,” Kelin told CNBC’s Steve Sedgwick in an interview recorded on Thursday.

Russian President Vladimir Putin sent a message to Iran’s new supreme leader, Mojtaba Khamenei, earlier this week, offering his “unwavering support” to Tehran and saying the country “has been and will remain the Islamic Republic’s reliable partner.”

The war has been raging for two weeks, with heavy strikes reported across Iran’s capital city and shipping traffic through the strategically vital Strait of Hormuz severely disrupted.

The White House has said the objectives of Operation Epic Fury have been to destroy Iran’s ballistic missile arsenal and production capacity and its navy, sever its support for proxies in other countries and ensure Iran can never acquire a nuclear weapon.

The White House said on Thursday these objectives “have remained unchanged unambiguous, and consistent” since the operation began on Feb. 28.

“We have a lot of sympathy with Iran. We have a lot of sympathy as well with the Persian Gulf states, there is no doubt at all. As for the beginning, I cannot understand the position of when everybody is blaming Iran,” Kelin said.

“[The] crisis has started with the, as I have said, with Israel and U.S. aggression against Iran and it was in the middle of talks, of course,” he continued, referring to negotiations over Iran’s nuclear program held in the Swiss city of Geneva last month.

“My president discussed this issue with the president of the United States, and we can make a good contribution by the way to finish it, to wrap it up.”

CNBC has contacted a spokesperson at the White House and Israel’s Foreign Ministry and is awaiting a response.

Alongside China, which has received millions of barrels of oil through the Strait of Hormuz even as war chokes the waterway, Russia stands as one of Iran’s most influential diplomatic partners.

U.K. Defense Secretary John Healy told reporters on Thursday that Putin’s “hidden hand” appears to be behind Iran’s military playbook as well as potentially some of Tehran’s military capabilities.

Iran has reportedly fired off more than 2,000 Shahed drones across the Middle East since the war began. These drones, which were first designed in Iran, have been used extensively during Russia’s invasion of Ukraine.

Ukrainian President Volodymyr Zelenskyy said earlier this week that the Kremlin’s own assessments estimate that more than 1.3 million Russian soldiers have been killed and wounded on the battlefield since Russia launched its full-scale invasion of Ukraine in February 2022. CNBC could not independently verify this report.

A report from the Center for Strategic and International Studies published in January said Russian battlefield casualties are significantly greater than Ukrainian fatalities, with Ukrainian forces likely suffering somewhere between 500,000 and 600,000 casualties.

Kelin said he was sure that both Moscow and Kyiv would eventually agree to a diplomatic resolution to the war.

“I cannot say when it is going to happen, but a diplomatic solution is badly needed,” Kelin said.

Kelin said The U.S. was “playing a constructive role in this diplomatic effort,” but added: “Since Ukraine is not prepared at the moment and since Europe still prefer to back up Ukraine as much as possible, to supply it with weapons, with money … making no efforts to solicit or to help this diplomatic solution, this will last for some time.”

U.S-brokered talks on the Ukraine war have been put on hold due to the Iran conflict, with U.S. Special Envoy Steve Witkoff telling CNBC on Tuesday that the discussions would now likely take place next week. Ukraine’s Zelenskyy had urged the U.S. not to remove sanctions on Russia ahead of those talks, although the White House has since moved to temporarily lift sanctions on Russian crude at sea.

The European Union’s foreign policy chief, Kaja Kallas, recently said there appears to be “no end in sight” to Russia’s full-scale invasion of Ukraine.

Speaking at a news conference on Monday, she said it is clear Russia’s army was “bogged down” and its economy is in steep decline.

“Russia’s maximalist demands cannot be met with a minimalist response,” Kallas said. “It’s just common sense, if Ukraine’s military is to be limited in size, Russia’s should be too.”

The U.S. on Thursday launched new trade investigations into 60 economies to determine whether they failed to curb imports of goods made with forced labor.

The probes, conducted under Section 301(b) of the Trade Act of 1974, include China, the European Union, India and Mexico, according to a statement from the United States Trade Representative.

“Despite the international consensus against forced labor, governments have failed to impose and effectively enforce measures banning goods produced with forced labor from entering their markets,” U.S. Trade Representative Jamieson Greer said.

“These investigations will determine whether foreign governments have taken sufficient steps to prohibit the importation of goods produced with forced labor and how the failure to eradicate these abhorrent practices impacts U.S. workers and businesses,” he said.  

Section 301 permits the U.S. to impose tariffs on countries found to have engaged in unfair trade practices without congressional authorization — legal authority that Trump had used during his first term to levy duties on Chinese goods.

The new investigations could ultimately replace at least some of the reciprocal tariffs that the Supreme Court struck down last month.

The forced-labor probes follow Section 301 investigations launched on Wednesday, targeting excess industrial capacity across more than a dozen economies that also included China, the EU and Mexico.

The investigation come as Treasury Secretary Scott Bessent is expected to meet with his Chinese counterpart He Lifeng in Paris this weekend to continue bilateral trade and economic talks, and weeks ahead of a meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping.

“Cuba’s next,” said Sen. Lindsey Graham, a Republican and ally of U.S. President Donald Trump, after the U.S. and Israel began strikes on Iran.

The U.S. has imposed an oil blockade on the communist-run island nation since January, shortly after its ally and a key provider of oil, Venezuelan President Nicolás Maduro, was seized in an extraordinary U.S military operation. It has caused a worsening economic crisis and left Cuba facing its biggest test since the collapse of the Soviet Union.

Now Iran, with which Cuba has a strategic partnership, is under sustained attack. “This communist dictatorship in Cuba, their days are numbered,” Graham told Fox News’s “Sunday Night in America.”

Before the Iran strikes, Trump said he wanted a “friendly takeover” of the island, without giving details. The comments, alongside the U.S. attacks on Iran and Venezuela, have done little to allay growing fears in Havana, experts told CNBC.

A “friendly takeover” could resemble Venezuela in the aftermath of Maduro’s removal, “where you still have an authoritarian regime in power but moving in the direction and at the speed that the US determines,” said Carlos Solar, senior research fellow, Latin American Security at RUSI, a London-based defense think tank.

Solar told CNBC by email that Cuba had lost support from Venezuela and Iran “at a moment of maximum pressure” from the Trump administration.

But he added: “What is unclear is how the US will make the Cuban regime break, forcing Havana to capitulate.”

“We are not seeing the kind of military buildup prelude to operation Absolute Resolve that eventually led to Maduro being captured in January. It could well be that the US approaches Cuba in a totally different way,” Solar said.

A spokesperson for the White House and Cuba’s embassy in London did not respond to a CNBC request for comment.

Cuba’s Foreign Affairs Ministry has called for an end to the Middle East conflict and said it “condemns in the strongest terms” the joint U.S. and Israel attack on Iran on Feb. 28.

Russia recently warned that the situation in Cuba appeared to be escalating after Cuban forces killed four people who were off its coast in a U.S.-registered speedboat.

Trump has also said Cuba’s government poses “an unusual and extraordinary threat” and pledged to impose tariffs on any country that supplies it with oil. The U.S. Treasury said late last month, however, that it would allow the resale of Venezuelan oil to Cuba’s private sector.

The move appeared to reflect a small step to alleviate the island’s acute fuel shortage, which has forced a wave of airlines cut flights to the country. Tourism has long been a significant source of revenue for Cuba’s cash-strapped government.

Par Kumaraswami, professor of Latin American Studies at the U.K.’s University of Nottingham, told CNBC the Trump administration’s strikes against Iran and recent comments about Cuba’s regime had increased the mood of uncertainty and anxiety in Havana.

“Cubans are increasingly concerned about how they will survive in the midst of such global chaos, and the recent violence against Iran will have done nothing to allay their fears,” Kumaraswami said by email.

“At the same time, there are indications that the US administration is negotiating with the Cuban government regarding changes to Cuba’s economy, and this is indeed mirrored by Cuban President Miguel Díaz-Canel’s current focus on economic improvement as the priority,” she added.

Kumaraswami said the “message from Cuba” had been “constant” since the communists came to power in 1959: “Survival will only be achieved through adaptation to the changing geopolitical context.”

Cuba has adopted measures to protect essential services and ration fuel supplies for key sectors. The United Nations has previously warned of a possible humanitarian “collapse” as the country’s oil supplies dwindle.

“Cuba just bought itself a window — but it’s a narrow one,” Robert Munks, head of Americas research at risk intelligence company Verisk Maplecroft, told CNBC by email.

“The operation against Iran removes Cuba – temporarily – from Washington’s sights, as the US administration will be preoccupied with the Gulf campaign in the coming weeks.”

But Munks said he expected Cuba to return to the headlines, adding that the Cuban diaspora in South Florida would apply pressure and Washington has shown it is prioritizing the Western Hemisphere in its remodeled national security strategy.

Four years of war between Russia and Ukraine are beginning to take their toll on the countries’ demographics as the conflict puts women off — or prevents them — from starting or expanding their families.

While the effects of that broad-based hesitancy to have children might not be immediately apparent, a decline in the birth rate can have far-reaching consequences for economies and societies further down the track.

Since Russia’s full-scale invasion of Ukraine began on Feb. 24, 2022, Ukraine’s fertility rate — the average number of births per woman — has plummeted, exacerbated by the war, the loss of partners and spouses in the fighting, and family separation and mass emigration.

In 2021, Ukraine’s total fertility rate stood at 1.22 but this has since dropped to 1.00 in 2025, according to United Nations population data. Some have cited a more dire metric, with the First Lady of Ukraine, Olena Zelenska, warning in December that the fertility rate in the country had plunged to 0.8–0.9 children per woman, with the war and insecurity across Ukraine causing this “critical decline.”

For a society to replace itself from one generation to the next, without relying on migration, a total fertility rate of 2.1 children per woman is necessary.

Russia, too, has also seen a longer-term trend downwards in its fertility rate exacerbated by the war. In 2021, Russia’s fertility rate was 1.51 but by 2025, it had dropped to 1.37 children per woman, down from 1.4 recorded the year before.

But four years of war appear to have played a big part in deterring or preventing women in Ukraine from having children, while in Russia, women seem resistant to repeated calls from the Kremlin, and President Vladimir Putin, to have larger families.

Declining birth rates pose big problems for countries as they have knock-on effects on the economy and society, with few births meaning fewer workers in the labor force in future, as well as lower productivity and economic growth.

That means lower tax receipts for governments and extra strain on pension and healthcare systems as an ageing population grows and becomes dependent on a shrinking working population.

While the declining fertility and birth rate — referring to the number of live births per 1,000 people each year — had been declining before the war, Russia’s invasion made the situation even worse, Iryna Ippolitova, senior researcher at the Kyiv-based Centre for Economic Strategy, told CNBC.

“Of course, in 2022 it got it even worse because of this massive migration and because the majority of those who left Ukraine were people of working age, economically active people,” she noted, adding:

“A lot of women who theoretically could have children left, and for those who stayed, the war and uncertainty meant they were unprepared to give birth in Ukraine, and the number of births is still declining.”

Even if peace talks come to fruition and the war ends, Ippolitova said migration out of Ukraine could continue, while those staying in the country could be put off having families if they fear a repeat invasion by Russia. This, she said, was another reason why Ukraine needed security guarantees as part of any peace deal.

Although fertility trends are notoriously hard to predict, and baby booms are often seen after wars end, Ippolitova said the country’s low fertility rate could still trouble the Ukrainian economy in the future.

Schools and universities were already starting to experience falling numbers of pupils, she said, signaling a smaller working-age population down the line.

“I think that it is a huge problem. We have labor shortages right now, already, and after the war, it will only get worse … In 10 or 15 years when people my age retire, there will be nobody to replace them on the labor market,” Ippolitova said.

The Russian state has introduced incentives for women who have three or more children, including lump-sum payments, tax breaks and state benefits. The Kremlin has even revived the Soviet-era “Mother Heroine” award, giving women a cash reward of 1 million rubles (around $13,000) for having 10 or more children.

Resistance to such incentives remains, however, with Russia recording 1.222 million births in 2024, the lowest annual total since 1999.

In December, Putin said during his year-end press conference that the fertility rate stood at 1.4 in 2025 (the actual figure was 1.374) and suggested Russia needed a baby boom.

“We also have a slight decline [in the fertility rate] — approximately 1.4. We need to achieve at least 2.0,” Putin said during his annual “Direct Line”, telling the public that “we must make the happiness of motherhood and fatherhood fashionable.”

Critics say Putin’s position on the country’s low fertility rate boils down to control rather than demographic concerns.

“I strongly believe that Putin’s regime’s efforts to double down on encouraging births is not related to any kind of demographic trends. This is all about societal control,” Konstantin Sonin, the John Dewey Distinguished Service Professor at the University of Chicago Harris School of Public Policy, told CNBC.

“[Russia’s authorities] want women to be at home, they want women to be with kids. They want men to care about the women, not about politics,” Sonin, a prominent Putin critic, said.

CNBC has contacted the Kremlin for a response to the comments and is awaiting a reply.

Sonin argued that Putin had already shown he did not care about demographics by starting the war against Ukraine, with the conflict causing economic instability, labor market shortages and inflation.

Efforts by the Kremlin to encourage more births had fallen flat, Sonin said, because women in Russia did not feel safe and secure, with the low birth rate direct evidence of that and effectively dispelling positive images of the country and war promoted by Russia and state-run media.

“There are more important things for any woman, for any young family, than just how much money in a direct cash transfer they will receive from the state. What matters for them is the general feeling of safety. And this is not there in Russia,” Sonin said.

“The quality of life has fallen since the beginning of the war. Hundreds of thousands of young people are dead because of the war, so people suddenly feel much less safe than they felt in other circumstances.”