US war costs near $29bn as Iran conflict rattles global economy
Harvard research shows the US spending roughly $2 billion daily on immediate war costs, with lubricant manufacturers absorbing 50% production cost spikes and car dealerships grappling with supply disruptions and fuel price pressures.
May 13th 2026 · United States
The Iran conflict is causing cascading economic disruptions across industries, with US military spending climbing toward $29 billion and potentially reaching $1 trillion, while lubricant manufacturers and car dealerships face rising costs and supply chain pressures. The Pentagon's revised estimate represents a $4 billion increase from late April, driven by equipment repairs, replacements, and ongoing operational expenses. Harvard Kennedy School research indicates approximately $2 billion is spent daily on immediate war costs, with Harvard war budgeting expert Linda Bilmes warning this is "the tip of the iceberg." The conflict has become politically sensitive ahead of US midterm elections, as Democrats seek to connect military spending to inflation concerns. Vertu Motors, a London-listed car dealership group, reported stockpiling motor oil due to supply disruptions from Qatar while facing lower demand for diesel vehicles as fuel prices rose more than 31 percent since late February. The company saw adjusted pre-tax profit drop to £24.5 million from £29.3 million a year earlier, despite revenues increasing to £4.83 billion, citing pressure from Government Zero Emission Vehicle targets that created an oversupply impacting EV prices and profitability. Chief Executive Robert Forrester noted that demand for older vehicles aged seven years or more has grown as consumer finances remain constrained. The lubricant industry has absorbed a 50 percent increase in production costs since the West Asia conflict erupted, passing approximately 30 percent of that burden to consumers through two price increases beginning May 1. Nagendra Pai, CEO of Motul India and South Asia, told reporters that companies insulated consumers through April using inventory purchased in March, but that further price hikes are expected, though a second increase could be avoided if conditions improve. Larger companies with long-term raw material contracts saw strong sales, while smaller competitors struggled to source products.