{"id":85134,"date":"2026-07-30T17:09:25","date_gmt":"2026-07-30T15:09:25","guid":{"rendered":"https:\/\/www.greenpeace.org\/international\/?p=85134"},"modified":"2026-07-30T17:09:34","modified_gmt":"2026-07-30T15:09:34","slug":"true-cost-us-israeli-war-iran-fossil-fuels-energy-shock","status":"publish","type":"post","link":"https:\/\/www.greenpeace.org\/international\/story\/85134\/true-cost-us-israeli-war-iran-fossil-fuels-energy-shock\/","title":{"rendered":"Fossil fuel dependence makes conflict more expensive: the true cost of the war on Iran"},"content":{"rendered":"\n

The ongoing illegal war waged by the United States and Israel against Iran has already cost the US more than US$100 billion in direct military spending<\/a> and related economic losses. However, this figure captures only a fraction of the conflict\u2019s true toll.<\/p>\n\n

Beyond the immediate fiscal burden on governments, the war has triggered global energy market volatility<\/a>, inflated basic living costs, disrupted international trade<\/a>, and caused immense human suffering. These compounding impacts expose a fundamental vulnerability: the world\u2019s continued dependence on fossil fuels<\/a> transforms regional crises into severe global economic and humanitarian shocks.<\/p>\n\n

Human losses and the humanitarian crisis in Iran and the wider Middle East<\/strong><\/h2>\n\n

While financial statistics dominate economic debates, the most severe cost of the conflict is human. Beyond the geopolitical and market disruptions, the US\u2011Israeli war on Iran has inflicted widespread destruction<\/a> across the region. Direct military bombardment has led to  thousands of civilian and military casualties<\/a>, shattering families and leaving deep, generational trauma.<\/p>\n\n

The systematic destruction of housing, schools, and essential civic infrastructure has forced millions onto perilous displacement<\/a> routes, crowding families into under-resourced shelters. Compounding this crisis, targeted damage to critical power grids, water treatment plants, and regional hospitals has left entire populations cut off from clean drinking water, electricity, and emergency healthcare. As basic lifelines collapse, the conflict rapidly transforms from a regional war into a catastrophic, full-scale humanitarian emergency.<\/p>\n\n

\"09
09 April 2026, Lebanon, Beirut: A worker tries to salvage boxes from a destroyed building in an area hit by Israeli strikes on Beirut.
\u00a9 Marwan Naamani \/ dpa \/picture alliance via Getty<\/div><\/figcaption><\/figure>\n\n

The Pentagon\u2019s bill is only the beginning<\/strong><\/h2>\n\n

The war has already cost US taxpayers more than US$100 billion, according to Fortune<\/a>. On 21 July, US Defense Secretary Pete Hegseth told Congress that military operations against Iran had reached US$37.5 billion<\/a>, and the Pentagon has requested an additional US$67.1 billion to further fund the operation. All this while making massive cuts to funding for healthcare<\/a> and clean energy. <\/a><\/p>\n\n

While substantial, this figure measures only the direct military expenditure. It omits the far larger economic toll borne by global businesses, public finances, and households coping with energy shocks and inflation.<\/p>\n\n

The Strait of Hormuz: a fossil fuel chokepoint at the heart of the Iran energy shock<\/strong><\/h2>\n\n

The conflict has re-emphasised the strategic vulnerability of the Strait of Hormuz<\/a>. Updated data from the US Energy Information Administration (EIA)<\/a> indicates that 20.9 million barrels of oil per day roughly one-fifth of global petroleum consumption passed through the Strait in the first half of 2025. The corridor is equally vital for liquefied natural gas (LNG)<\/a> exports, particularly from Qatar.<\/p>\n\n

Because a massive portion of global energy flows through this single maritime bottleneck, even the <\/em>threat of disruption impacts the global economy. Heightened geopolitical risk instantly spikes oil prices, shipping insurance rates, and transport costs. The economic consequences of the war extend beyond energy prices and trade disruptions. <\/p>\n\n

As risks in the Strait of Hormuz intensified, major maritime insurers repriced or withdrew war-risk cover, while Lloyd’s expanded its high-risk designation<\/a> to the entire Persian Gulf. According to the World Economic Forum, shipping traffic through the Strait fell by around 95%<\/strong>, prompting the US International Development Finance Corporation (DFC) to establish a US$40 billion<\/strong> reinsurance facility to help restore maritime trade. The episode illustrates how governments are increasingly acting as insurers of last resort when geopolitical risks exceed the capacity of private markets.<\/p>\n\n

\"Secretary
Secretary of War Pete Hegseth and Chairman of the Joint Chiefs of Staff U.S. Air Force Gen. Dan Caine conduct a press briefing on Operation Epic Fury at the Pentagon, Washington, D.C., March 4, 2026.
\u00a9 Flickr \/ US Department of War \/ Alexander Kubitza<\/div><\/figcaption><\/figure>\n\n

Higher food prices, a deepening cost of living crisis and windfall fossil fuel profits<\/strong><\/h2>\n\n

Rising energy prices rapidly ripple through every sector of the economy. Agriculture still relies heavily on fossil fuels<\/a> for machinery, fertilizer production, irrigation, and shipping. Consequently, high oil prices directly drive up the cost of food, hitting lower-income households hardest.<\/p>\n\n

While consumers bear the burden of inflation, major energy corporations reap massive profits<\/a> from market instability. Greenpeace estimates that during the initial phase of the conflict:<\/p>\n\n