An uneasy mix of celebration and anxiety dominates the ‘Davos of energy’ as the month-long Iran war further disrupts the global economy

Festive music from the band Sweet Crude blared at a party minutes after President Donald Trump’s former defense secretary warned that ending the war now would cede ownership of the narrow Strait of Hormuz—the world’s most critical choke point—to Iran.

“We’re in a tough spot, ladies and gentlemen,” said retired Gen. Jim Mattis at the CERAWeek by S&P Global conference in Houston. “I can’t identify a lot of options.”

The dichotomy of the celebratory, yet nerve-wracking vibes...