Oil prices dropped sharply on Wednesday after renewed optimism surrounding U.S.-Iran negotiations eased fears of prolonged supply disruptions in the Middle East. West Texas Intermediate crude fell more than 5% to settle at $88.68 per barrel, while Brent crude declined over 5% to close at $94.29 per barrel.

The selloff followed comments from U.S. Secretary of State Marco Rubio, who said Washington would give ongoing talks with Iran “every chance to succeed,” signaling continued support for a diplomatic solution despite rising regional tensions. President Donald Trump also reiterated that the Strait of Hormuz would remain open to international shipping, helping calm concerns over global energy flows.

Earlier in the day, Iranian state media reported that Tehran could restore commercial traffic through the Strait of Hormuz to prewar levels within a month if an agreement with the United States is reached. However, the White House later dismissed reports of a draft agreement as “completely fabricated,” highlighting the uncertainty still surrounding negotiations.

Meanwhile, tensions remain elevated after U.S. forces carried out strikes in southern Iran, which the Pentagon described as defensive operations. Tehran has vowed retaliation, keeping geopolitical risks firmly in focus for energy markets.

Despite the sharp decline in prices, analysts caution that oil supply conditions may not normalize quickly even if a diplomatic breakthrough is achieved. Industry estimates suggest it could take months before regional oil flows return to normal levels, meaning volatility is likely to remain high in the near term.

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