Oil prices fall more than 4% after Rubio says U.S. will give Iran talks 'every chance to succeed'

Oil prices experienced a significant decline on Wednesday, following remarks from Secretary of State Marco Rubio indicating that the U.S. intends to provide diplomatic negotiations with Iran "every chance to succeed."

West Texas Intermediate (WTI) futures dropped 4.68%, settling at $89.50 per barrel by 2:03 p.m. ET. International benchmark Brent crude also saw a decrease of 4.57%, falling to $95.03.

During a Cabinet meeting at the White House, Rubio remarked that there has been some progress in discussions with Iran. He noted that President Donald Trump prefers a diplomatic path but still has alternative options should those efforts fail, likely alluding to the potential for renewed military action.

Rubio stated, "The bottom line is that we prefer the negotiated diplomatic route and we're going to give it every chance to succeed."

In his comments, Trump emphasized that he would not permit Iran to gain control over the Strait of Hormuz as a condition of any agreement. The Strait serves as a critical passage for approximately 20% of the world’s oil supply, which transited through it prior to the conflict.

"The strait is going to be open to everybody. It's international waters, nobody's going to control it," the President asserted during the Cabinet meeting.

Earlier reports from Iranian state television indicated that Tehran pledged to restore commercial traffic through the Strait to prewar levels within one month of an agreement with the U.S., as per Reuters.

This report suggested that Iran would oversee ship traffic in collaboration with Oman, as negotiations continue. However, the White House subsequently described the announcement claiming a memorandum of understanding as "a complete fabrication."

Tensions between Iran and the U.S. have remained high this week, with both sides oscillating between the possibility of a diplomatic resolution and renewed military confrontation. U.S. forces recently conducted strikes in southern Iran, which the Pentagon referred to as a defensive measure, prompting Tehran to promise retaliation.

Industry experts express skepticism about the rapid restoration of oil flows to preconflict levels. Sultan Ahmed al-Jaber, head of Abu Dhabi National Oil Co., stated last week that it could take at least four months to elevate oil flows to 80% of normal capacity, even if hostilities between the U.S. and Iran were to cease immediately. He projected that full normalization might not occur until the first or second quarter of 2027.