Two Trillion Dollars War

Imran Bajwa

With dust, death and destruction, ravaged by US, Israeli and Gulf Cooperation Council (GCC) Ammo temporarily settled in Iran, it’s time to re-calibrate. This 108-day war has cost over $2 trillion so far, with its full effects likely to take 3-5 years to normalise, if at all. The entire world has paid over $1.3 trillion in lost GDP due to lost economic activity, fuel-related inflation and supply chain disruptions, as per World Bank data. American citizens and taxpayers suffered a quarter of that loss of over $4 billion a day during this war, thus far. Of direct military-related costs including munitions, the US paid $110 billion, Israel $13 billion and Iran roughly $3 billion during the war. Besides, major collateral losses incurred are over $300 billion to reconstruct Iran and over $60 billion to repair over 60 damaged oil and gas producing facilities, primarily in the GCC. All this adds upto over $2 trillion in just 108 days. With such a major intervention on a global scale, one may ask what the US has achieved beyond the Joint Comprehensive Plan of Action (JCPOA) signed in July 2015 after two years of intense negotiations under President Obama without waging any war or disruptions.

International Atomic Energy Agency (IAEA) inspectors regularly certified that Iran was applying JCPOA terms in letter and spirit for all three years until Trump unilaterally abrogated it during his first term in 2018 without any provocation or justification and despite Iran staying well within 3.5 percent enrichment and a reduced number of centrifuges from 20,000 to 5000. Iran also reduced its uranium stockpile from over 7,000 kilograms to just under 300 kilograms, shipping the excess to Russia under the JCPOA. Similarly, Iran reduced its heavy water stockpile to below 120 metric tons, exporting for storage the excess to Oman. Despite all this, even today the US claims Iran has 400 kilograms of uranium enriched to 60 percent levels after Trump walked out of the JCPOA and doubled down on sanctions.

With a $300 billion reconstruction budget committed, Iran has already secured twice the investment in the Marshall Plan to rebuild Europe’s economy, including Germany, which was $150 billion in today’s equivalent outlay after WWII. Clause 6 of the Memorandum of Understanding (MoU) between the US and Iran reads:

“The United States undertakes, together with its regional partners, to create a comprehensive plan agreed upon by both parties for the rehabilitation and economic development of the Islamic Republic of Iran, while ensuring financing of at least $300 billion. The implementation mechanism of this plan, as part of the final agreement, will be formulated within 60 days.”

Lindsey Graham’s Statement on X says: “The idea of a $300 billion reconstruction fund, given who is in charge of Iran, seems to be tone deaf. It would be akin to a Marshall Plan for Germany with the Nazis still in charge.” He later mellowed his stance: “Can you imagine if Saudi Arabia, Qatar, and the United Arab Emirates invest $300 billion in Iran? That would tell me that Iran has changed,” he told CBS TV. Iran’s frozen assets of upto $130 billion are committed to be released as well, 20 percent of which, or $24 billion, is committed to be released in the next 60 days. Beyond that relief, Iran will be allowed to sell oil and petrochemicals worth $15 billion per month during the next 60 days and thereon. Interestingly, the US President and Secretary of State Rubio are insisting maize and soyabeans of US origin will be bought with these dollars. This is nothing but a meagre eyewash addressed to the Republican base in the farming states of the US and a frustrated exposure of a declared superpower.

The $2 billion of this crop adjustment plan was quickly and flatly denied byIran’s chief negotiator and Speaker of Parliament Ghalibov and Iran’s deputy foreign minister. Even if it is conceded, it will make a meagre half a percent of the total Iran Marshall plan of $430 billion, or just a week’s worth of Iranian imports. Iran has been importing soy and maize for its poultry and livestock feed mainly from Brazil and other South American countries. Secondly, the Secretary of State’s tall claim that two million barrels of oil flowed through the Strait of Hormuz in any one day after the ceasefire is again adding a fake feather in your cap, as more than two million barrels flowed uninterruptedly every day through Hormuz before the War. Partial and patchy restitution of sea traffic is not a sign of victory at all.

Finally, the US will recoup its direct war-related costs by replenishing Patriot batteries to the Gulf Cooperation Council (GCC) Sheikhs, besides rebuilding over 60 oil and gas sites, mainly in the GCC, at about $50 billion worth of business.

Pakistan, on the other hand, almost singularly, saved the world over $2.2 trillion through its effective diplomacy, which needs to be stressed for appropriate windfalls and compensations.

The 2026 Global Peace Index (GPI) estimates that successful diplomacy to end the Iran war could be worth more than $2.2 trillion to the global economy in a single year. That is the direct economic dividend of the gap between a fragile ceasefire and a resumed war. Interestingly, the global economic impact of violence reached $21.8 trillion in 2025, equivalent to 10.5 percent of global GDP, which provides the context that the Iran war is not an isolated event, but rather has accelerated a decade-long trend of rising conflict costs, driven by military expenditure, displacement, and GDP losses. The economic impact of armed conflict has more than tripled since 2008.

The whole world is going nuts. The countries directly affected, i.e. Iran, Israel and the Gulf states, face the steepest losses relative to their economies. Under a fragile ceasefire, Iran could lose around 15 percent of GDP. Combined with extensive damage to refineries and nuclear infrastructure, the cumulative toll is severe. Qatar, whose entire LNG export capacity is stranded, faces losses of around nine percent of GDP under the same scenario. Across the Gulf group as a whole, this implies GDP losses of roughly 6.2 per cent, as per GPI. What needs to be stressed is that the Strait of Hormuz carries much more than oil and gas. Gulf states supply approximately 45 percent of global sulphur and 50 percent of global urea exports, both critical inputs for fertiliser production and resultant global food production. Qatar produces around 40 percent of the world’s helium, an essential element in semiconductor manufacturing, which is the basic driver for digitisation in the AI Age. All of these are now stranded.

More dangerously, the fertiliser shortage will not show up in food prices immediately. It works on a six- to nine-month lag, feeding into harvests after the Q2 2026 planting season across South Asia and East Africa. A 10 percent increase in fuel prices raises food distribution costs by three to five per cent in import-dependent economies, with the burden falling hardest on the poorest households, for whom food already absorbs 50 to 70 per cent of income. The food crisis, in other words, is running on a timer, and it will peak at the same moment that several critically indebted countries face sovereign debt rollover deadlines.

Pakistan, Egypt and Kenya face $5.1 billion in combined debt maturities in November and December 2026 alone. Under the fragile ceasefire, rolling these over at manageable interest rates is uncertain for all three and effectively impossible if the war continues.

In short, all South Asian and East African states are more exposed and will take significant ancillary losses despite no direct role in this War, down the line. Worst of all around 10,000 human beings have been smoked in fire for the whims and machinations of a single man, Benjamin Netanyahu. Besides Iran and Israel, the US remains the biggest casualty of this War.