US-Israel versus Iran conflict: Strategic pathways and the expected end state
How will the current conflict in the Gulf region evolve and materialise across regional and national economies? An immensely complex question, but one of central importance for strategic planning in the region and around the world. A new report from Management Partners explores a range of scenarios and offers a structured guide for decision-makers.
The report, titled ‘Faultlines of Containment’, assesses how the US-Israel versus Iran conflict is most likely to evolve and what that means for the Gulf Cooperation Council (GCC). Drawing on these insights, the authors translate emerging scenarios and pathways into a set of recommendations for governments, business executives, and investors to inform strategic planning.
To bring structure to an otherwise highly complex conflict, the authors focus on two key dimensions.
Interim Pathways
First, they explore ‘interim pathways’ – scenarios describing how the conflict is most likely to evolve from its current state. Five such pathways emerge as the most plausible, with ‘Competitive Maritime Containment’ identified as the leading trajectory.
This pathway reflects the continued centrality of shipping access, chokepoint leverage, and selective coercion. It centres on Hormuz-based pressure, repeated operational friction, and sustained strain on critical corridors and infrastructure. Unlike earlier patterns of tacit de-escalation, bargaining in this scenario does not settle into a temporary freeze but gradually develops into a more explicit, rules-based process.
Its longer duration reflects the reality that any negotiated arrangement requires more than reduced violence. Actors need time to translate deconfliction into more formal understandings on shipping access, restraint around strategic infrastructure, monitoring, and escalation-control mechanisms.
End States
The second dimension considers the potential end states. Unlike interim pathways, which describe transitional dynamics, end states define the longer-term forms of regional order – or disorder – that emerge after repeated cycles of escalation and response. The aim is not to map near-term developments, but to identify the most plausible durable outcomes of the conflict.
Numerous end states are outlined, with four scenarios emerging as the most likely. Of these, ‘Stabilised Armed Truce’ carries the highest probability at 40%, as it requires less trust, less verification, and less decisive victory than alternative outcomes.
The Expected Base Case
The Management Partners report notes that each interim pathway can transition into multiple end states, depending on specific conditions, decisions, or escalatory triggers. Rather than assuming a single fixed route, the model presents a range of conditional transitions, each with its own probability.
The most probable scenario – the ‘base case’ – sees maritime containment hardening into a stabilised armed truce. The maritime domain remains central, pressure stays elevated, and no principal actor is positioned to impose a decisive outcome at an acceptable cost. The pathway begins with several weeks of intense maritime contestation, followed by a longer phase of indirect bargaining, calibrated restraint, and repeated efforts to cap escalation without reaching a formal settlement.
The timing logic is therefore sequential rather than abrupt. Maritime containment must first consolidate as the dominant operating pattern, after which negotiation and deconfliction efforts can gradually reduce violence. These efforts do not disappear; rather, they prove sufficient to establish a durable tacit freeze, but not strong enough to produce a formal regional framework.
The result is the most likely medium-term outcome: a more organised form of instability that eventually settles into practical restraint.
This pathway is structurally durable because it aligns with the incentives of the principal actors. The United States seeks to restore access and maintain pressure without assuming indefinite war ownership; Israel prioritises the degradation of Iranian capabilities; Iran focuses on regime survival while retaining leverage; and regional actors favour continuity and insulation over deeper, formalised conflict.
Recommendations for Businesses and Investors
For stakeholders affected by the conflict – from governments to investors and small- and medium-sized businesses – this base-case scenario provides a foundation for policy and strategy.
“The right private-sector response is not to assume rapid normalisation. The current conflict pattern still combines severe shipping disruption, widening Red Sea risk, continued proxy pressure, and a US campaign framed around broad conventional objectives rather than near-term disengagement. That makes persistent friction, route uncertainty, and confidence volatility the central planning assumptions.”
The responses of business should be differentiated by sector:
- Logistics, shipping, and trade-intensive businesses should shift from pure efficiency models towards route resilience and controllable throughput.
- Aviation, tourism, and hospitality businesses should focus on scenario-based demand management, cost flexibility, and balance-sheet resilience.
- Industrial and construction businesses should stress-test imported input chains and fixed-price obligations.
- Banks and non-bank lenders should tighten exposure reviews across trade finance, shipping-linked borrowers, real estate leverage, and weaker SMEs.
- Real estate developers and operators should clearly distinguish between income-producing core assets and transaction-driven inventory.
For investors, the region remains investable, but selectivity is critical. The report advises moving from a “post-shock rebound” mindset to one focused on persistent risk premiums and disciplined allocation.
Conclusion
The authors conclude that the conflict should not be viewed as a short escalation cycle moving towards rapid resolution. Instead, it is evolving into a prolonged contest of coercion, containment, and selective deconfliction over multiple months. No principal actor can secure a clean strategic victory at acceptable cost, but several can sustain pressure within defined constraints.
As a result, the most likely trajectory is not resolution, but a more organised and persistent form of instability – termed ‘managed instability’. “The most likely pathway remains one in which maritime pressure stays central, diplomacy remains narrow and functional rather than transformational, and the conflict settles into a costly but governable coercive regime.”
“The result is a conflict pattern that is bounded enough to avoid immediate general war, yet active enough to continue generating recurring shocks.”
Taken together, the research points to a clear conclusion: this is no longer an environment where the primary goal is rapid recovery from disruption. Instead, organisations must learn to operate and allocate capital effectively within disruption. That means building for continuity rather than only growth, pricing for friction rather than only demand, favouring agility, and treating resilience not as a defensive overhead, but as a source of competitive advantage.
