Who Profits from the Iran War? America’s War Business
As the US-Iran conflict enters a temporary lull, a growing body of evidence is revealing the staggering financial toll of the war — and the systematic machinery that turns battlefield destruction into corporate profit. A detailed analysis published by Xinhua News Agency and republished by People’s Daily on June 25, 2026, dissects what it calls America’s “war business model” — a deeply entrenched system where the military-industrial complex profits handsomely while American taxpayers, consumers, and allies foot the bill.
The Price Tag of War
The numbers are staggering. The US Defense Department has requested $80 billion to “fill the gap” in Iran war costs, with total war spending estimated between $50 billion and $100 billion. Harvard Kennedy School public finance expert Linda Bilmes projects the final cost “at least $1 trillion.” The Pentagon has requested over $200 billion in supplemental funding for Iran operations alone, pushing the FY2026 defense budget to a historic $1.01 trillion.
On the battlefield, the scale of weapons consumption has been immense: over 1,200 Patriot interceptor missiles at $4 million each, and more than 1,000 Tomahawk cruise missiles at $3.6 million each. This rapid depletion of inventories has triggered a cascade of replacement orders — a dynamic that analysts describe as the engine of the war economy.
Wall Street Cheers the War
On the very first day of US airstrikes on Iran, the three major defense contractors — Lockheed Martin, RTX (Raytheon), and Northrop Grumman — saw their stock prices surge 4% to 6%, generating an estimated $25 billion to $30 billion in paper gains for shareholders. Lockheed Martin’s year-to-date stock gain approached 40% as the conflict deepened.
President Donald Trump convened Lockheed Martin and other defense contractors in early March, demanding they “restock inventory as soon as possible.” The message was clear: war creates consumption, and consumption creates contracts.
Senator Lindsey Graham (R-SC) called the war an “excellent investment.” Ben Freeman of the Quincy Institute for Responsible Statecraft put it more bluntly: for arms dealers, the Iran war is “a business,” and for the US government, a “catalyst” for military expansion.
The Military-Industrial Complex: A System Designed for War
The analysis traces the roots of America’s war business to World War II, when President Franklin D. Roosevelt had the government invest in factories nationwide and hire private contractors to operate them. The Cold War normalized this model, with US defense spending reaching $10 trillion during that period.
University of Washington Associate Professor Rebecca Thorpe, in her book “The American Warfare State,” notes that regional economic dependence on defense production led politicians to strengthen “ideological commitments” to military hegemony and foreign intervention, shaping America’s “permanent readiness” military-industrial system.
Duke University Professor Emeritus Alex Roland argues that the combination of military, defense industry, and political interests in shaping US security policy prioritizes special interests over national interests.
A key mechanism binding this system together is the “revolving door.” According to the Quincy Institute, of 32 US four-star generals who retired between 2018 and 2023, 26 entered the defense industry. This flow of senior military leadership into corporate boardrooms ensures that defense policy remains aligned with industry interests.
Who Bears the Cost?
While defense contractors reap windfall profits, the costs are distributed across American society — and beyond.
US taxpayers and consumers have borne the heaviest burden. Moody’s Analytics estimates the Iran war has cost American taxpayers and consumers approximately $132 billion in cumulative losses. At peak oil prices, Americans paid over $500 million extra per day in fuel costs. New York crude oil futures surged from under $70 per barrel to over $100 per barrel, and US average gasoline prices rose 33.4% in a single month. US consumer confidence fell 6% in March 2026, and Moody’s estimated the probability of a US recession at 48.6%.
American farmers have also been hit hard. Agricultural fertilizer prices rose 40% for urea and 20% for ammonia, squeezing an already struggling agricultural sector.
US allies in the Middle East are paying a different price. On March 19, the State Department approved $16.5 billion in arms sales to the UAE, Kuwait, and Jordan. On May 1, it approved $25.7 billion in air defense systems to Kuwait, the UAE, and Bahrain — approximately $17 billion of which was not publicly announced.
A System Out of Control?
The analysis highlights what it describes as a systemic failure of oversight. The Pentagon has failed its annual audit for eight consecutive fiscal years (2018-2025). In FY2025, auditors found 26 “material weaknesses.”
The “Lobster Gate” scandal — in which the Pentagon spent $93.4 billion in a single month in September 2025, including nearly $9 million on Alaskan king crab and lobster tails, $12,000 fruit basket stands, and nearly $100,000 high-end pianos — has become a symbol of what critics call a defense budget system spiraling out of control.
As the UK organization Action on Armed Violence stated: “For the United States, ‘war is business,’ and the military-industrial complex is the ‘true winner of endless conflicts.’”
The Broader Pattern
The Iran conflict fits into a well-established historical pattern. From Afghanistan to Iraq, Libya to Syria, each US military engagement has generated enormous profits for defense contractors while imposing costs on the broader economy and society.
Jagannadha Tamvada, a professor at Kingston University in the UK, observes that war brings enormous benefits to specific groups in the US — precisely the people who have the ability to influence the direction of war. The destructiveness of war, he notes, is not in their consideration.
The Intercept, a US news website, has argued that US policy-making has long been held hostage by the “permanent demands of the war economy,” and that war has become a “core component” of US wealth extraction, economic operation, and global influence.
What Comes Next?
As the Iran conflict pauses, the economic reckoning is only beginning. The Pentagon’s $200 billion supplemental request, the ongoing arms sales to regional allies, and the sustained elevation of defense spending all point to a system that is structurally incentivized to continue — and expand — military engagement.
China’s official position, as stated by Foreign Ministry Spokesperson Mao Ning on March 31, calls for an immediate and complete cessation of military operations and urges dialogue and negotiations. China has expressed particular concern about damage to Iranian cultural heritage sites.
For the American public, the question remains: in a system where war is structured as a profit center, who has the incentive to pursue peace? As the Xinhua analysis makes clear, the answer may be the most uncomfortable truth of all.
This article is based on analysis by Xinhua News Agency reporter Ma Qian, published June 24, 2026, and republished by People’s Daily on June 25, 2026.