Editor's Note: The following text is excerpted from the 2026 Third-Quarter Forecast ; the complete text is available to subscribers at the Focused Access level and above . The third quarter will be characterized by a fragile easing of geopolitical tensions in the Middle East. A tenuous ceasefire between the United States and Iran will allow a gradual but uneven normalization of energy and commodity flows through the Strait of Hormuz. Negotiations will, however, remain volatile and prone to intermittent escalation. A durable, comprehensive settlement will remain out of reach due to deep disagreements over Iran's nuclear program and related security concerns. As a result, the risk of renewed conflict will persist throughout the quarter and beyond, continually threatening the stability of energy and commodity supply chains. High energy costs will drag on global growth by squeezing household purchasing power and raising input costs for companies.