Oil prices tumbled more than 5% Wednesday after comments from Secretary of State Marco Rubio signaled that the Trump administration would give negotiations with Iran “every chance to succeed,” easing fears of an immediate escalation in the Strait of Hormuz.
CNBC reported that crude’s decline accelerated after Rubio’s remarks, which traders interpreted as a clear signal that Washington is prioritizing diplomacy over confrontation in the Iran conflict.
Benchmark Brent and U.S. crude both slid sharply in intraday trading as investors priced out some of the geopolitical risk premium tied to potential disruptions in the key global shipping route.
The drop followed heightened volatility in recent sessions tied to concerns over Iran’s posture in the region and the possibility of broader military escalation affecting energy flows.
Rubio said the administration would continue to pursue talks with Tehran while giving diplomacy “every chance to succeed,” a phrase that markets seized on as a dovish shift in tone.
President Donald Trump has also backed continued negotiations but has insisted any agreement must meet U.S. terms, leaving uncertainty over how quickly a deal could materialize.
Energy analysts said the Strait of Hormuz remains the central pressure point for oil markets, with any sign of de-escalation immediately reflected in prices.
Despite Wednesday’s sharp decline, traders cautioned that volatility is likely to persist as negotiations continue alongside regional tensions.