Economic Commentary

June 30, 2026

Tensions Ease with U.S./Iran Agreement

The U.S. and Iran reached a fragile truce with the signing of a 14-point memorandum of understanding bringing a halt to hostilities. The agreement opened a 60-day window for further negotiation on multiple issues including freedom of navigation through the Strait of Hormuz, Iran’s nuclear program and the lifting of sanctions. The agreement was universally welcomed by financial markets as the opening of the Straight allows for the flow of shipping traffic, particularly oil shipments, to resume. How quickly transit through the straight can be returned to pre-war levels will be closely watched as tensions remain high and navigation through the Straight has becoming increasingly difficult. Oil prices, which had spiked at the onset of hostilities, fell on news of the agreement finishing the second quarter 31% lower with WTI at $69.50. Elevated energy prices had been the most impactful way the conflict was being felt amongst businesses and consumers, the agreement has the potential to remove a significant headwind to global growth as we move into the second half of 2026.