The eruption of Operation Epic Fury on February 28, 2026, marked a tectonic shock that shattered a half-century-old global security architecture. With the killing of Supreme Leader Ali Khamenei in the opening hours, the US–Israel war against Iran rapidly evolved from a conventional air campaign into a brutal laboratory of defense economics. Beneath the rhetoric of sovereignty and security lies a vast financial engine operating with surgical precision, converting every explosion at Natanz or Fordow into line items on multinational balance sheets.

This war represents the culmination of a cascading escalation that has been building since 2023. By day 12, US expenditures had reached an extraordinary $16.5 billion. Daily operational costs surged to as much as $500 million, underscoring the voracious appetite of modern warfare for precision-guided munitions. Iran’s retaliatory closure of the Strait of Hormuz triggered a spike in oil prices beyond $118 per barrel, arguably the most severe energy disruption since the crises of the 1970s.

Militarily, Iran has absorbed devastating losses, with over 190 ballistic missile launchers and 140 naval vessels destroyed in coordinated strikes. Yet Israel has not been immune. Its economy has been strained by costs of roughly $3 billion per week, driven by reserve mobilization and the suspension of civilian activity. This war has exposed a widening chasm between physical devastation on the battlefield and financial prosperity in the stock exchanges of Wall Street and Tel Aviv.

The transformation signals the emergence of a new order in West Asia, where military power is measured by the depth of ammunition inventories. As the dust settles over Tehran, the contours of economic gain become increasingly clear. War is no longer viewed merely as a failure of politics, but as a catalyst for growth within a global defense industry operating on a full wartime footing.

For the US defense industry, the war in Iran has been a windfall, turning deficits into surpluses almost overnight. Within days of the operation’s launch, shares of major contractors surged: Northrop Grumman rose 6%, RTX (formerly Raytheon) climbed 4.7%, and Lockheed Martin hit a 52-week high with a 3.3% gain. These increases were........

© The Times of Israel (Blogs)