The True Cost of the US-Iran Conflict: A Global Economic Toll

Moody’s Analytics reports that the conflict between the U.S. and Iran has cost taxpayers and consumers $132 billion, as the ripple effects continue to destabilize global energy, housing, and logistics.

Human and Political Toll

State-run Iranian media reported 13 U.S. soldier deaths and over 3,300 Iranian fatalities. Regional authorities confirmed 3,826 deaths in Lebanon, nearly 60 in Israel, and dozens across the Persian Gulf states.

Energy Market Disruption

The paralysis of the Strait of Hormuz drove average U.S. gasoline prices from under $3 per gallon to $4.56. Even with recent stabilization, the “war premium” adds over $360 million to American fuel expenditures daily.

Diesel prices rose from $3.76 to $5.69 per gallon, driving up transport costs, while airline ticket prices increased by nearly 27 percent due to surging jet fuel costs.

Impact on Housing and Credit

The conflict impacted the housing market, with 30-year mortgage rates climbing from under 6 percent to 6.52 percent. Freddie Mac notes this adds roughly $110 to the monthly payment for a $400,000 home.

Global Economic Consequences

The World Bank lowered its 2026 global GDP growth forecast to 2.5 percent, the lowest level since the pandemic. Trade disruptions in the Strait of Hormuz caused fertilizer prices to jump by 47 percent and created fuel shortages across parts of Asia and Africa.

According to the U.S. Energy Information Administration, Middle Eastern producers cut oil output by over 11 million barrels per day compared to pre-conflict levels. The IMF noted significant losses for Qatar following attacks on energy infrastructure.

Escalating Military Expenditures

Pentagon Comptroller Jules Hurst informed the Senate that operational costs reached $29 billion in May, excluding repairs for U.S. bases in Kuwait and Bahrain damaged by drones and missiles. The Trump administration is expected to request additional funding from Congress.