CERAWeek panellists deliver stark warning on Iran

A candid panel late on day one of the CERAWeek energy conference delivered a sobering assessment of the escalating Iran conflict, underlining the lack of clear strategic options and the growing risks to global markets.

General Jim Mattis, a former US defence secretary, Suzanne Maloney of the Brookings Institution think tank and Carlos Pascual of S&P Global offered a frank discussion in contrast to the more nonchalant tone elsewhere at the conference in Houston, Texas.

“We’re in a tough spot and I can’t identify a lot of options,” Mattis told delegates, highlighting the strategic uncertainty facing Washington as the crisis deepens.

“If the US declares victory now, Iran will own the Strait of Hormuz.”

Maloney warned that the consequences for Gulf states could be particularly severe if the conflict ends inconclusively.

“For the Gulf countries the worst option is to leave a weakened but embittered regime still in place,” she said.

“Their position is completely untenable, they are not party to the decision-making but they are on the front line.”

These remarks landed heavily with an audience already unsettled by earlier developments, including mixed signals from Washington on its next steps.

For many US delegates, the discussion appeared to crystallise a growing realisation that the war may not be unfolding as initially expected – and that its economic and energy consequences could be both significant and long-lasting.

That more cautious and uncertain mood is likely to shape discussions for the remainder of the week, as energy industry leaders grapple with a crisis that is testing both markets and policy assumptions.

Watch Frank Kane’s video round-up of day one at CERAWeek by S&P Global

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• Frank Kane: What does the US want from the Gulf?