Oil market alert: Sanctions chess, the EU holds the line while the US plays 4D negotiation poker

For the past three years, the EU and the US have been marching in lockstep on Russian sanctions, forming an ironclad financial firewall around Moscow. That unity? It might be cracking.

The backdrop: Since Russia’s full-scale invasion of Ukraine in February 2022, the G7 has been coordinating a relentless campaign—hammering Russia’s banking sector, suffocating its oil and metals industries, and cutting off imports. The biggest hammer? The threat of being locked out of the US dollar system, which has kept Russia in check.

But Trump’s high-stakes diplomacy is shaking things up. His administration, led by Secretary of State Marco Rubio, just threw a curveball—meeting with Russian Foreign Minister Sergei Lavrov on Tuesday and agreeing to "lay the groundwork for future economic and investment opportunities." That’s diplomacy-speak for "sanctions relief might be on the table."

Rubio later mentioned that "the EU would have to be at the [negotiation] table at some point," hinting that Europe’s sanctions could become a bargaining chip in Washington’s broader dealmaking.

The EU didn't blink. Within hours, it fired back with its 16th sanctions package against Russia, signalling that Brussels isn’t budging—even if Washington is. One EU diplomat put it bluntly:
“We must continue to forge our path on Ukraine, despite what any other ally chooses to do.”

But here’s the real question—can EU sanctions hold weight if the US pivots? Brussels has always known that America’s economic firepower—particularly its ability to cut off access to the dollar—was the enforcement muscle behind these sanctions. Without that, Europe is essentially playing goalie with no defenders.

Behind closed doors, EU diplomats claim the US is still "hawkish" on sanctions, but the mixed signals out of Washington tell a different story. On one hand, there’s talk of reinforcement. On the other, there’s Trump’s signature "Art of the Deal" maneuvering—where everything is a potential trade-off.

If Washington decides to ease restrictions—or even just look the other way on enforcement—Russia will waste no time exploiting the cracks in the financial blockade. It won’t need to break the wall down when it can simply walk through the holes.

Bottom line? The EU is holding firm for now. But if Trump’s endgame involves cutting a deal with Moscow that leaves Europe carrying the sanctions burden alone, Brussels might find itself on the wrong side of a one-sided sanctions war.