Oil prices fall more than 5% after Rubio says U.S. will give Iran talks 'every chance to succeed'

On Wednesday, oil prices experienced a notable decline following remarks from Secretary of State Marco Rubio, indicating that the United States is prepared to provide diplomatic talks with Iran "every chance to succeed."

West Texas Intermediate (WTI) futures plummeted over 5%, concluding the day at $88.68 per barrel. Similarly, the international benchmark Brent crude oil also faced a drop exceeding 5%, settling at $94.29.

During a Cabinet meeting at the White House, Rubio acknowledged that some progress had been made in discussions with Iran. He noted that while President Donald Trump favors a diplomatic approach, alternative options remain available should these talks falter, likely alluding to potential military action.

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

Trump reiterated his stance, clarifying that Iran will not gain control over the Strait of Hormuz as part of any agreement. Prior to the conflict, the Strait facilitated the passage of approximately 20% of the world's oil supplies.

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

Earlier reports from Iranian state television claimed that Tehran had committed to restoring commercial traffic through the Strait of Hormuz to prewar levels within a month of reaching an agreement with the U.S., as per a Reuters report. This envisaged Iran overseeing ship traffic in the strait in collaboration with Oman, amid ongoing negotiations.

However, the White House refuted these claims in a social media statement, labeling the report regarding a memorandum of understanding as "a complete fabrication."

This week, the U.S. and Iran faced a precarious situation, balancing between reaching an agreement and the potential for renewed military escalation. U.S. forces conducted defensive strikes in southern Iran, an action the Pentagon characterized as necessary. In response, Tehran vowed to retaliate against these strikes.

Industry experts express skepticism regarding the rapid return of oil flows to prewar levels. Sultan Ahmed al-Jaber, the head of Abu Dhabi National Oil Company, indicated last week that even with the immediate resolution of the U.S.-Iran conflict, it would take at least four months to restore oil flows to 80% of normal levels, with full normalization expected by the first or second quarter of 2027.