Oil prices tumbled more than 5% Wednesday after 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.
Traders interpreted Rubio’s remarks as a clear signal that Washington is prioritizing diplomacy over confrontation in the Iran conflict, causing Benchmark Brent and U.S. crude to slide sharply during intraday trading as investors priced out some of the geopolitical risk premium tied to potential disruptions in the key global shipping route.
The decline followed heightened volatility in recent sessions due to concerns over Iran’s regional posture and the possibility of broader military escalation affecting energy flows.
Rubio stated that the administration would continue pursuing talks with Tehran while giving diplomacy “every chance to succeed,” a phrase that markets immediately 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 noted that 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.
