US–Israel War With Iran: Who Profits and Who Pays the Price

From the Editor’s Desk

March 13, 2026

The Pentagon has told lawmakers in the United States that the first six days of the Iran war cost the exchequer about $11.3 billion, a sum that could theoretically fund basic food assistance for around 18–20 million people for an entire year. The spending is likely to rise sharply in the coming weeks and months, and much of that spending will flow to a small circle of industries, while ordinary citizens in many countries will carry the economic shock.

The White House may seek about $50 billion more to replenish weapons stocks and sustain operations, according to Reuters.

The first beneficiaries of the war spending are likely to be companies in the American defence industry. The cruise missiles, interceptor missiles and precision bombs that took years to manufacture disappeared from military inventories within days of the intensive operations. The Pentagon will now have to replace them immediately. This replenishment cycle will benefit a very small group of companies that already dominate the U.S. military procurement system.

Raytheon, one of the largest American weapons manufacturers and part of the defence company RTX, produces the Tomahawk cruise missile, a weapon the United States has used in strikes across the Middle East for many years. Each Tomahawk costs about $2 million. During the opening days of a war, dozens or even hundreds of these missiles may be fired. Raytheon may now receive fresh government orders to produce new missiles, contracts that can last for several years.

Lockheed Martin, another major American defence contractor, manufactures the Patriot PAC-3 interceptor and the THAAD missile defence system, both designed to shoot down incoming missiles. During regional conflicts, governments expect missile retaliation, which increases demand for such defence systems. Lockheed already holds long-term Pentagon agreements to expand production of PAC-3 interceptors and THAAD missiles. Escalation in the Middle East therefore increases pressure on the U.S. government to speed up those production lines.

Boeing, one of the largest American aerospace and defence companies, also stands to gain, through another type of weapon that attracts less attention in headlines but is used in large numbers during wars. The company produces JDAM guidance kits, devices that turn ordinary bombs into precision weapons that can hit specific targets. Each kit costs tens of thousands of dollars. Air campaigns can use thousands of them. Large orders from the Pentagon, therefore, provide Boeing with steady revenue.

These are just three examples of companies that operate within the defence procurement network that grows more valuable whenever the Pentagon increases military spending.

Energy markets form the second major area of wartime profit.

Military escalation around the Persian Gulf has disrupted shipping routes through the Strait of Hormuz, one of the world’s most important oil corridors. Roughly one-fifth of global oil supply passes through this narrow waterway. Tanker traffic has slowed as shipping companies reassess security risks, insurers have raised war risk premiums, and several vessels have altered routes or delayed voyages. Even the possibility of disruption sends oil prices upward because traders expect shortages. Higher oil prices translate directly into higher revenue for producers.

Companies such as ExxonMobil and Chevron benefit from this dynamic because every barrel they sell becomes more valuable.

Energy exporting states gain as well. With the rise global oil prices rise, Russia’s tax revenues from oil exports increase automatically. A conflict in the Middle East therefore strengthens the finances of an entirely different geopolitical actor.

Logistics and insurance companies also gain from the disruption that war brings to global transport. Shipping firms begin charging higher freight rates as vessels divert from dangerous waters and take longer routes. Insurance companies add war risk premiums to cargo entering conflict zones, and air cargo operators raise their prices as fuel costs rise and aircraft are forced to fly longer paths to avoid hostile airspace.

Those higher transport and insurance costs do not stay within the shipping or aviation industries, but spread through the entire trading system. Exporters pay more to move goods across oceans, airlines spend more on fuel and longer routes, and importers face higher costs by the time cargo reaches their ports. Businesses usually pass much of this increase along the supply chain, so the final bill reaches consumers in the form of higher prices for everyday goods. This is how ordinary citizens face the consequences through inflation.

Petrol prices rise first because crude oil becomes more expensive, as has already begun to happen. Higher fuel prices then push up transport costs across the economy, affecting airlines, shipping companies and road transport. Food prices also rise because agriculture depends heavily on fuel for fertilisers, farm machinery and the transport of crops.

Countries that depend heavily on imported fuel face the greatest strain when energy prices rise. Many Asian economies fall into this category, including Bangladesh, Sri Lanka and Pakistan, which must now spend far more of their foreign currency reserves to buy oil and gas from abroad. As those import bills grow, governments face pressure on their finances, national currencies tend to lose value against the dollar, and the higher cost of fuel spreads through the economy, pushing up the price of many everyday goods.

For households hundreds or even thousands of miles away from a war zone, the impact appears quickly. Electricity bills can rise, bus fares may increase and imported goods often become more expensive. When governments try to soften the blow by subsidising fuel prices, they usually fund those subsidies by cutting spending in areas such as healthcare or education.

We should also look at the human cost inside the war zone, which is far greater than the financial figures. Air strikes destroy homes, factories and the basic infrastructure that supports everyday life. Families can lose their houses and livelihoods within days as neighbourhoods turn into battle zones. Large numbers of civilians flee cities under attack and become internally displaced. Hospitals struggle to treat the wounded while facing shortages of medicine and supplies, and schools close. Recovery in such conditions is slow, and rebuilding damaged economies and social life can take decades.

In sharp contrast, war can also bring political advantages for governments. Military conflict allows leaders to rally public support by appealing to national security and patriotism. In such moments, emergency spending on defence, rather than on education or healthcare, often moves quickly through legislatures with little opposition or debate over spending priorities, as politicians become reluctant to question military budgets during an active conflict.

In all this, while a few corporations and even the governments involved in the war gain economically and politically, ordinary citizens bear the burden through higher living costs and unstable economies. At the same time, people often find themselves arguing over who is right and who is wrong in the conflict, relying largely on information produced during wartime by the governments involved and by their ideological allies around the world.

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