In the initial 100 hours of its military campaign against Iran, the United States is estimated to have spent a staggering US$5.2 billion, equivalent to US$1.2 billion per day. This expenditure encompasses the deployment of thousands of munitions, fighter jets, and naval assets. The figures, analyzed by the Center for Strategic and International Studies, highlight the immense cost of Operation Epic Fury, the US military’s offensive against Iran.
While the Pentagon has yet to release an official estimate, these figures align with a report from The New York Times, which indicated that Pentagon officials informed Congress of a US$6 billion expenditure in the first week of the conflict. The duration of the war remains uncertain, with US President Donald Trump suggesting it could last “four weeks or so,” though he later expressed hope for a shorter engagement without elaborating further.
Financial Windfalls Amid Human Tragedy
As the conflict rages, the US is looking to replenish its military stocks and accelerate weapons production, potentially benefiting major weapons manufacturers. However, this economic gain is overshadowed by the tragic human toll. Iran’s health ministry reports 1,200 deaths and 10,000 injuries since the war’s onset. Hostilities between Hezbollah and Israel have resulted in at least 850 fatalities in Lebanon, according to local authorities.
Some US allies in the Gulf, including the United Arab Emirates, Bahrain, and Kuwait, have also reported casualties following Iranian retaliatory strikes. The United Nations has expressed concern for migrant workers in Lebanon and Iran, describing them as “among the most vulnerable” and calling for an investigation into an attack on a girls’ school in Iran, which reportedly resulted in 150 student deaths.
Profiting from Conflict: A Closer Look at Beneficiaries
Despite the human cost, the war has been financially advantageous for defense contractors. On the first trading day after the war’s onset, weapons manufacturers saw their stock prices rise by 1.5%. Lockheed Martin, the world’s largest defense contractor, experienced a 4% increase, reaching near-record highs. The company’s products, including the F35 fighter jet and the THAAD missile defense system, are actively used in the military operation.
According to the Quincy Institute for Responsible Statecraft, Lockheed Martin’s stock price has surged nearly 40% since the year’s start, driven by escalating US-Iran tensions.
Other defense firms, such as RTX and Northrop Grumman, have also seen significant stock gains. Ben Freeman, a director at the Quincy Institute, noted that major US arms makers’ market values increased by billions within the war’s first ten days. He highlighted that the US has been rapidly consuming weapons, including hundreds of Lockheed Martin’s Patriot missiles, each costing approximately US$4 million.
Global Economic Ripple Effects
The war’s impact extends beyond defense contractors. Veteran Republican Senator Lindsay Graham, a staunch advocate of US foreign intervention, suggested the conflict could yield economic benefits for the US by reshaping the Middle East’s geopolitical landscape. He argued that securing the Strait of Hormuz, a critical oil transit route, would be a “really good investment” for US interests.
However, the global economy is grappling with the closure of the Strait of Hormuz, leading to spiking fuel prices. Middle Eastern oil giants have shuttered refineries in response to Iranian strikes. While some energy exporters outside the Gulf, such as the US and Australia, may experience short-term gains from higher prices, these benefits are largely confined to the energy sector.
John Ferguson, head of the Future of Trade initiative at Economist Impact, stated, “As the price of oil and gas has increased sharply, major producers of these commodities will see an increase in their energy export earnings in the coming months.”
The Broader Implications of War
The ongoing conflict in the Middle East underscores a complex interplay of economic interests and geopolitical dynamics. While defense contractors and certain energy exporters may benefit financially, the broader implications of the war raise questions about the long-term consequences for global stability and security.
As the war continues, the full impact on weapons companies and the global economy remains to be seen. The potential for increased US military spending and the influence of defense contractor lobbyists in Washington, D.C., suggest that the voices of the American public, largely opposed to prolonged conflict, may be overshadowed by economic and strategic interests.
Ultimately, the war in the Middle East serves as a stark reminder of the paradoxical nature of conflict, where economic gains for some are offset by profound human suffering and geopolitical uncertainty.
