The US has few clear or favourable strategic options in its conflict with Iran, former US Secretary of Defense James Mattis said March 23, as US and Israeli attacks have significantly degraded Iran’s military capacity but are unlikely to prevent the country’s regime from exerting control over shipping through the Strait of Hormuz.

The conflict has reshaped the geopolitical order in the Persian Gulf, Mattis said on a panel at CERAWeek by S&P Global energy conference in Houston, Texas. This has damaged Gulf states’ energy-intensive economies while making it more likely Iran would assert lasting supremacy over the strait — even if US President Donald Trump tried to declare an end to conflict in the hopes of unilaterally reducing hostilities, Mattis said.

“I don’t think we can just walk away from it now that we’ve broken that construct, and say we won and so it’s over,” Mattis, who served as Defense Secretary during the first Trump administration, said. “We’re in a tough spot, ladies and gentlemen, and I can’t identify a lot of good options.”

“You can say it’s over, and you can even declare victory, and guess what, the enemy gets a vote,” Mattis said. “And that will undo everything you think you set out to accomplish.”

Two ships sailed through the Strait of Hormuz on March 22, up from zero on March 21, according to a March 23 report by S&P Global Commodities at Sea(opens in a new tab). Almost all of the crude that has exited the strait in March has come from Iran, the CAS report said.

Despite military successes — Mattis said the US and Israel had effectively destroyed the Iranian air force and navy — any campaign to control the vital shipping lane would require a highly complex campaign of attacks on small anti-ship cruise missiles, which Mattis said “can be fired off the back of a pickup truck” from anywhere along hundreds of miles of Iranian coastline.

Mattis said Iran had likely not placed mines in the Strait of Hormuz because the regime sees an opportunity to “clear ships going through and show sovereignty over the strait.” He also said US forces could seize and hold Kharg Island, Iran’s key energy export hub, but that the military lacked a strategic rationale for doing so.

“They would, I think, surrender their ability to ship oil for a while, thus worsening the world’s energy supply problem, because that actually puts us on the horns of a dilemma with the world saying we need the oil and there’s the Americans sitting on it,” Mattis said. “So we actually create [a problem] with a military success.”

The former Trump cabinet member’s analysis contrasted with Trump’s, who on March 23 suggested that if negotiations with Tehran succeed, the strait would open “immediately,” and the US would jointly control the passage with Iran’s next leader.

The strait would be opened “very soon, if this works,” Trump told reporters, after discussing ongoing US-Iran talks. He later added that the strait would open “immediately” if negotiations succeed. When he was asked who would control the strait after it reopens, Trump said, “Maybe me, me and the ayatollah, whoever the ayatollah is.”

Crude oil futures settled down more than 10% on March 23 after Trump announced the US would postpone strikes on Iranian power plants and energy infrastructure for five days after “productive conversations” with members of the Iranian regime.

NYMEX May West Texas Intermediate crude settled down $10.10/barrel at $88.13/b, and ICE May Brent declined $12.25/b to $99.94/b.

Suzanne Maloney, vice president and director of the foreign policy program at the Brookings Institution, said that despite suffering significant military losses, the Iranian regime believed it had gained leverage in the conflict.

“From their perspective, they not only survive that first onslaught, but they have actually gained what they believe is the upper hand by taking this crisis that began with the goal of regime change, or perhaps the goal of eradicating, for the second time, Iran’s nuclear program, and they have now moved it into a geo-strategic conflict where they believe they have the advantage,” Maloney said at CERAWeek by S&P Global Energy.

Source: Platts