Iran war costs spread through fuel, trade and military budgets

The U.S. and Israel-led war against Iran has left costs that extend well beyond the battlefield, even as a preliminary framework and cease-fire arrangement may limit further fighting, NPR reported. The conflict has driven up energy prices, strained global trade and added billions of dollars to U.S. military spending.

The human toll has also been severe. State media cited by NPR put Iranian deaths at more than 3,300, while 13 U.S. service members were killed. Authorities in affected countries reported 3,826 deaths in Lebanon, nearly 60 in Israel and dozens more across Gulf states.

Costs for U.S. consumers

Moody’s Analytics estimates that U.S. consumers and taxpayers have absorbed about $132 billion in costs so far, according to NPR. The largest visible burden has come through fuel prices after traffic through the Strait of Hormuz was sharply curtailed.

AAA data cited by NPR showed average U.S. gasoline prices rising from just under $3 a gallon at the start of the war to as high as $4.56. The U.S. Energy Information Administration says American drivers use 360 million to 380 million gallons of gasoline a day, meaning the peak increase added more than $500 million a day at the pump. NPR reported that even after prices eased, the added wartime cost remained above $360 million a day.

Diesel prices also climbed, moving from $3.76 a gallon before the war to $5.69 in early April, according to AAA. NPR reported that higher diesel costs raised shipping expenses, while airline fares rose nearly 27% over the past year, largely because of jet fuel prices, according to Bureau of Labor Statistics data cited in the report.

The conflict has also fed into housing costs. Freddie Mac said the average 30-year mortgage rate reached 6.52% last week. NPR reported that for a buyer of a $400,000 home with 20% down, that rate increase adds about $110 to the monthly payment compared with levels seen before the war.

Global trade and regional damage

The World Bank cut its 2026 global growth forecast to 2.5%, the weakest projection since the coronavirus pandemic, NPR reported. The bank estimated Gulf economies would grow 1.3% this year, down from 4.5% in 2025.

The World Bank did not issue a new Iran forecast, citing unusually high uncertainty. NPR reported that a U.S.-Iran memorandum of understanding described by the Trump administration includes a proposed $300 billion for Iran’s postwar reconstruction and development.

Energy and transport disruptions hit the Middle East heavily. The U.S. Energy Information Administration said Iran’s blockade of the Strait of Hormuz forced regional producers to cut crude output by more than 11 million barrels a day in May from prewar levels. The International Monetary Fund reported that flights from Dubai fell by two-thirds and flights from Doha dropped by three-quarters.

Some producers benefited from higher prices. Saudi Aramco reported a 26% increase in first-quarter earnings from a year earlier, while NPR said Saudi Arabia was able to reroute much of its oil through its East-West pipeline.

Pentagon and political fallout

Pentagon comptroller Jules Hurst told the Senate Armed Services Committee on May 12 that U.S. operational costs had reached $29 billion, according to NPR. Hurst said the figure was $4 billion above the administration’s April estimate because of repair and replacement costs.

NPR reported that the Pentagon estimate does not include repairs to U.S. bases in the Middle East, including facilities in Kuwait and Bahrain hit by Iranian drones and missiles. U.S. officials cited by NPR said more than a dozen military sites were attacked, damaging aircraft, radar systems and buildings.

The war has also weighed on President Trump’s standing. The New York Times polling average cited by NPR showed Trump’s net approval moving from minus 15 percentage points on Feb. 28, when the U.S. and Israel first attacked Iran, to minus 22 points by the end of May, before a partial recovery.

This story draws on original reporting from NPR.