How much did the 12-day war cost the US, Israel and Iran? – Report
Despite the ceasefire, American intelligence suggests the war may resume. Contrary to President Trump’s declaration that Iran’s nuclear capabilities had been “completely obliterated,” Iran’s uranium stockpiles appear largely intact.
The brief but intense conflict caused heavy economic losses for both Iran and Israel, with global trade disrupted and diverted flights. The aftermath may linger longer, experts say.
As a ceasefire brokered by US President Donald Trump holds for a second day, the damage from the 12-day war between Israel and Iran is becoming clearer. From shattered infrastructure to battered economies, both sides are now counting the cost of a conflict that could yet reignite.
Like past Middle Eastern wars: the Arab-Israeli War in 1967 or the Yom Kippur War in 1973, the confrontation that began on June 13 was symbolic. Lasting 12 days, the war resonated numerically: Israel’s identity as a nation of twelve tribes, and Iran’s dominant Twelve Shia tradition, gave the number unusual cultural resonance.
Despite the ceasefire, American intelligence suggests the war may resume. Contrary to President Trump’s declaration that Iran’s nuclear capabilities had been “completely obliterated,” Iran’s uranium stockpiles appear largely intact.
The 12-day conflict also left deep scars on Iran and Israel, strained regional supply chains, and sent ripples through global energy and trade markets.
As the ceasefire holds, the full cost of this war is still unfolding.
Iran’s toll
“The 12-day war between Iran and Israel this June inflicted substantial economic damage across the region, though the burden was uneven,” says Andreas Krieg, associate professor at King’s College London and director of MENA Analytica.
Iran, already under decades of Western sanctions, bore the heavier toll.
In an interview with TRT World, Krieg, a defence analyst, estimates total direct and indirect losses between $24–$35 billion, equivalent to approximately 6.3 – 9.2% of Iran’s estimated $380 billion GDP.
US and Israeli strikes degraded Iran’s nuclear infrastructure and caused a sharp drop in Tehran’s oil exports. Damage to energy installations and military infrastructure threatens to deepen Iran’s structural weaknesses and delay its post-war recovery.
“The war has deepened Iran’s fiscal and social challenges, with lasting implications for its internal stability,” says Aimen Jamil, an Islamabad-based expert on Iranian affairs.
US and Israel’s toll
Israel spent approximately $5 billion in the first week of strikes on Iran, with daily war costs hitting $725 million—$593 million for offensive operations and $132 million for defence and mobilisation.
Israel’s Iron Dome and other expensive air-defence systems have tried to stop Iranian strikes during the 12-day war with Tehran.
Israel’s Iron Dome and other expensive air-defence systems have tried to stop Iranian strikes during the 12-day war with Tehran.
Anti-missile systems alone cost Israel between $10 million and $200 million per day, according to The Wall Street Journal.
Had the conflict continued for a full month, total costs might have exceeded $12 billion, estimates the Aaron Institute for Economic Policy.
Israel, though economically more resilient, was not unscathed, according to Krieg.
He estimates losses of $11.5 billion to $17.8 billion, or 2.1–3.3% of its $540 billion GDP.
“These figures include military expenditures, infrastructure damage, and the interception of over 400 Iranian missiles,” Krieg adds. “But beyond the direct costs lie a deeper layer of disruptions. Israel’s high-tech sector, responsible for 64% of exports and a fifth of GDP, suffered workforce shortages as close to half a million of reservists were mobilised.”
Business closures, commercial flight suspensions, and labour gaps in agriculture and construction worsened the economic strain. These opportunity costs, including halted investment and delayed mega-projects, may have long-lasting consequences,” Krieg says.
All these factors have made Israel’s warlike government take a toll, prompting “a visible exodus” of Israel’s dual citizens, alarmed by the frequency and reach of missile attacks on strategic sites like oil refineries and major cities, according to Kreig.
Israel’s Central Bureau of Statistics estimates that more than 80,000 Israelis left the country in 2024, which corresponds to the highest number since the Zionist state’s founding in 1948. Nearly half a million have left since October 7, 2023.
Over 10,000 Israelis evacuated in the war’s first week, with more than 36,000 filing for compensation, according to the Israel Tax Authority.
Facing a widening budget deficit, the government is weighing spending cuts, tax hikes, or increased borrowing, which could push public debt above 75% of GDP.
The Finance Ministry, warning of dwindling reserves, requested $857 million for defence while proposing $200 million in cuts to health, education, and social services.
In a controversial move, Israel’s government recently imposed a travel ban on Jewish citizens, apparently to slow this outflow.
Experts see it as a sign of Israel’s growing insecurity and reputational damage from different wars it has engaged in. Civilian casualties in Gaza, Lebanon, and now Iran have led to widespread international condemnation of the Netanyahu’s government, including accusations of genocidal conduct.
“Investor confidence and diaspora support are eroding,” says Krieg. “The sense that the state can no longer guarantee security under the leadership of an increasingly risk-prone prime minister is spreading,” says Krieg.
While Israel “absorbed notable costs” due to multi-front military operations and infrastructure damage sustained from Iranian attacks, which added to the fiscal pressure of its ongoing operations in Gaza, the country’s “resilient economy and substantial reserves provided a cushion against immediate instability,” Jamil tells TRT World.
Compared to both Iran and Israel, Trump’s Operation Midnight Hammer cost the US to experience “a minor fiscal event” around $1 to $2 billion, an amount, which corresponds to a negligible percent of America’s $28 trillion economy, according to Krieg.
The US deployed 125 aircraft and fired dozens of bunker-busting bombs and Tomahawk missiles at key Iranian nuclear sites, notably Fordow, Natanz and Isfahan.
“Yet even with minimal direct financial exposure, the strategic cost for the US could grow if deeper involvement follows. Regional instability, global oil market volatility, and the perception of inconsistency in US diplomacy risk complicating Washington’s long-term position in the Middle East,” says Krieg.
Disrupting global trade
The 12-day war also impacted world trade and energy markets due to fears of escalation as many traders thought that Iran would block the strategic Strait of Hormuz, which accounts for a quarter of global oil exports.
As a result, insurance premiums for tankers spiked, doubling in some cases and shipping costs surged, as Brent crude prices went up by 15–20% before stabilising as escalation fears receded, says Krieg.
“Beyond oil, broader trade has also suffered. Major global shipping firms began rerouting vessels, chartering standby tonnage, and delaying Gulf-bound operations. These logistical changes raised costs and extended delivery times, especially impacting economies like India, China, and Europe that rely heavily on Gulf energy exports,” adds Krieg.
Other sectors from agriculture to pulp and paper also felt the impact, as shipping delays triggered hidden costs.
“Overall, the war exposed the extreme sensitivity of global trade to conflict in the Gulf and underscored the centrality of Hormuz as a global trade artery.”
Jamil highlights additional effects on air travel. Widespread flight cancellations and rerouted paths raised airline operating costs, although she sees these impacts as “limited and temporary” at the global level.
SOURCE:TRT World
