Oil Prices to Drop 10% as US-Iran Truce Eases Energy Inflation, Cohn Predicts

As of Sunday, June 14, 2026, the United States and Iran stand at the precipice of a historic memorandum of understanding that could reshape Middle Eastern geopolitics and the global economy. In an exclusive interview on CBS’s Face the Nation, Defense Secretary Pete Hegseth confirmed that a preliminary agreement—extending a ceasefire, committing to reopen the strategic Strait of Hormuz, and launching 60 days of intensive negotiations—is “not a matter of if, but when.” The announcement came even as the Israeli Defense Force struck Hezbollah targets in Beirut in retaliation for rocket fire, underscoring the fragility of the peace process. The MOU’s core provisions are ambitious: immediate cessation of hostilities, a pledge to open the Strait of Hormuz within 30 days (which Hegseth said could happen sooner), and a roadmap for resolving larger disputes, including Iran’s support for proxy forces like Hezbollah. The deal reflects President Trump’s persistent campaign to end America’s military engagements and bring down energy prices. In the same broadcast, inflation figures were flagged at a three-year high, making the economic stakes unmistakable. Former National Economic Council director and current IBM Vice Chairman Gary Cohn described a consumer psychology poised to shift from “fill up now” panic to “wait for cheaper fuel” patience, with gas prices already 10% off recent peaks. For global markets, the immediate signal is bullish. Oil futures had spiked during the four-month Iran conflict and the constriction of the Strait of Hormuz, a conduit for roughly 20% of the world’s petroleum. Reopening the strait could quickly reverse those gains and ease input costs across industries. Shipping insurers and logistics firms, which had priced in war risk premiums, are likely to see a relief rally. Yet the Iranian proxy puzzle remains. Hegseth stressed that Iran must “encourage” Hezbollah to stop firing rockets into Israel, and Israel’s “measured” response indicates a willingness to give diplomacy a chance—but any major flare-up could scuttle the entire process. The timeline is tight: if signed on June 14, the 60-day negotiation window runs through mid-August, a period during which Iran’s compliance on the Strait and proxy behavior will be tested daily. Cohn cautioned that price declines will not be overnight but will gradually reflect the new psychology. Meanwhile, Senators Mark Warner and Mark Kelly joined the program to provide congressional oversight perspectives, signaling that any lasting deal will require legislative scrutiny, particularly concerning sanctions relief and defense posture. Two U.S. aircraft carriers currently in the region were mentioned, with Hegseth hinting at potential withdrawal if peace holds—a move that would have significant implications for defense contractors and regional stability. The confluence of military, economic, and diplomatic threads makes this a pivotal moment. If the truce holds, consumers could see lower gas prices within weeks, and the Federal Reserve might gain room to address inflation without further rate hikes. If it collapses, energy prices could spike anew, reinforcing the very inflation President Trump aims to curb. The coming 60 days will test whether a memorandum can evolve into a durable framework—or become another false start in a volatile region.