Iran war costs mount: $132 billion burden on US amid global economic shock
The conflict with Iran lasted a little over 15 weeks before a preliminary peace agreement between the U.S. and Iran was reached this week. However
The conflict with Iran lasted a little over 15 weeks before a preliminary peace agreement between the U.S. and Iran was reached this week. However, the human and economic costs escalated quickly, with impacts extending well beyond the region. Amid growing domestic and international pressure, U.S. President Donald Trump said on Monday that he and Vice President JD Vance had electronically signed a document the previous day with Iranian officials, formally bringing an end to the war. The hostilities reportedly began on February 28 when the United States and Israel launched strikes on Iran. Even if oil shipments from the Middle East resume, economists and industry analysts say it may take some time before consumers notice any relief in prices at fuel stations, supermarkets, and other retail outlets. Disruptions caused by tensions around the Strait of Hormuz affected not only crude oil and refined fuel supplies but also broader supply chains, including fertilizers, food products, and even footwear. Businesses expect elevated costs to persist for some time, suggesting that consumers may continue to face higher prices in the near term. The overall cost of the war to the United States is estimated at around $132 billion, with final figures still being assessed as a 60-day negotiation period gets underway. According to Moody’s Analytics, the burden on U.S. taxpayers and consumers amounts to at least $132 billion, reflecting the broader economic impact of the conflict. That factors in military spending, rising energy and commodity prices and interest rates, said Mark Zandi, the company’s chief economist, as reported by the New York Times. A top Pentagon official told Congress last month that the cost had risen to around $29 billion for the military.
That estimate did not include the price of repairing about a dozen U.S. bases in the region damaged by Iranian attacks. The costs of repair and maintenance, as well as keeping carrier strike groups at sea, also need to be factored in. “It costs a lot of money to just keep everyone and all this apparatus deployed there,” said Linda Bilmes, a public finance expert and senior lecturer at the Harvard Kennedy School, as reported by the NYT. She further noted that the cost of replacing the large volume of munitions used by the U.S. military is expected to be significantly higher than their original procurement expenses. Iran also inflicted significant damage on other U.S. assets in the region, including a valuable military radar aircraft parked on a tarmac in Saudi Arabia and parts of the U.S. Embassy compound in Riyadh, according to reports. Energy Prices Americans have spent about $60 billion more on gasoline and diesel since the start of the conflict due to higher fuel prices, according to the Iran War Energy Cost Tracker from Brown University. This works out to roughly an additional $460 per household, with the total continuing to increase. At the beginning of the war between the United States and Israel and Iran, average gasoline prices were about $2.98 per gallon, according to AAA, a non-profit motor club association. Since then, fuel prices have repeatedly surged and are currently close to $4 per gallon. The international benchmark for crude oil has declined following the announcement of a peace framework on Monday, and is currently hovering around $80 per barrel. Earlier in March, prices had surged to approximately $120 per barrel.
The BriefWire