US military spending on Iran conflict reaches $37.5 billion as strikes intensify
President Donald Trump warns conflict with Iran is far from over as Pentagon reports war costs have soared to $37.5 billion. Fresh strikes hit Tehran as fighting spreads to critical energy chokepoints.
US military spending on Iran conflict reaches $37.5 billion as strikes intensify
President Donald Trump declared he was "not finished" with Iran as the conflict's financial burden reached $37.5 billion, with fresh US strikes triggering air defences in Tehran on Wednesday.
The escalating confrontation between the longtime adversaries has expanded beyond the Strait of Hormuz to encompass other key energy transit routes in the Middle East, raising concerns about global oil supplies. The Strait of Hormuz handles approximately 20 million barrels of oil per day, representing about 25 percent of global seaborne oil trade and roughly 20 percent of world petroleum consumption. The waterway also carries nearly 20 percent of global liquefied natural gas trade, including 96 percent of the UAE's LNG exports.
The US military said its latest attacks targeted "military logistics infrastructure" across Iran, while Iranian state media reported strikes around the country, including near Bushehr, home to Iran's only operational civilian nuclear power plant. The Russian-built facility, located 17 kilometers south of Bushehr city on the Persian Gulf coast, has been operational since its handover in September 2013.
"News sources reported minutes ago that air defence activity was heard in the west, east and northeast of Tehran," state television posted on Telegram.
Political pressure mounts
As the war approaches its fifth month with November legislative elections looming, Trump faces mounting political pressure to end the unpopular conflict. Secretary of Defense Pete Hegseth told lawmakers Tuesday that war costs had climbed to $37.5 billion, as he defended a request for tens of billions in additional military funding. Hegseth, who was confirmed as the 29th Secretary of Defense in a narrow 51-50 Senate vote on January 24, 2025, has overseen the sustained campaign against Iranian targets.
The Pentagon said Tuesday it had conducted an eleventh consecutive night of strikes against Iran, targeting military installations to "further degrade Iran's ability to threaten commercial shipping in the Strait of Hormuz."
Trump indicated Tuesday that the next American target could be Pickaxe Mountain, an underground complex near Natanz where Western intelligence suspects Iran is constructing an undeclared enrichment facility. The site, known in Persian as Kuh-e Kolang Gaz La, is located approximately 0.9 miles south of the Natanz Nuclear Facility and is buried at least 100 meters below bedrock, making it more fortified than Iran's Fordow enrichment facility. Intelligence assessments suggest Iran transferred thousands of uranium enrichment centrifuges to the mountain complex last fall, following attacks on its main nuclear sites during the 12-day conflict in June 2025.
Iran's Khatam Al-Anbiya military command warned it would "consider it as an expansion of war in the region" if such an attack were carried out, threatening strikes on "all the interests of America, the allies and supporters," state broadcaster IRIB reported.
Regional escalation
The warning came as Tehran broadened its offensive against US-allied Gulf states after its Houthi allies threatened to blockade Saudi ports. Saudi Arabia is the dominant contributor to oil flows through the Strait of Hormuz, accounting for approximately 38 percent of crude and condensate exports through the waterway at about 5.5 million barrels per day.
Kuwait's army said Wednesday its air defences engaged with drone attacks from Iran, the latest in a series of Tehran's reprisals. US ally Bahrain said Tuesday it intercepted Iranian attacks as sirens sounded repeatedly, while Kuwait and Jordan reported intercepting drone and missile strikes.
The Iranian army said it targeted American assets in Kuwait and Bahrain, including air defence systems, radar installations and administrative buildings.
"With this radar sweep, the enemy should prepare for even more decisive and powerful waves of drone and missile attacks," the Revolutionary Guards said in a statement carried by state news agency IRNA.
Trump said he would "take care of" Yemen's Iran-backed Houthi rebels if they followed through on a threat Monday to blockade Saudi Arabia's ports. "If something like that happens, we take care of it," Trump said. "We've done that with the Houthis before, and we haven't heard from them in a while since we did what we did originally."
Saudi Arabia strongly condemned the threat from what it called the "terrorist Houthi militia." The Houthis have largely remained on the sidelines since Israel and the United States attacked Iran in late February, maintaining a UN-brokered truce that took effect in April 2022. Though the ceasefire formally expired in October 2022 after two extensions, it has largely held in practice. Last week marked the first exchange of fire between Saudi Arabia and the Houthis in years.
Global energy implications
Maritime intelligence provider Vanguard Tech reported that a Singapore-flagged tanker and a Liberia-flagged tanker both "reversed course" in the Red Sea after loading crude at the Saudi port of Yanbu. If the Houthis enforce their blockade threat, they could endanger Riyadh's ability to bypass the Strait of Hormuz for some oil exports, with major repercussions for the global economy. Asian markets would be particularly affected, as approximately 84 percent of all crude oil and condensate shipped through the Strait of Hormuz is destined for Asia, with China alone receiving nearly 38 percent of total exports through the waterway.
The Revolutionary Guards said Tuesday that two tankers attempting to transit the strait "were hit by explosions, resulting in massive fires that brought them to a standstill." The UK Maritime Trade Operations agency earlier reported that an "unknown projectile" struck a tanker off the coast of Oman.
Despite the fighting, Iranian foreign ministry spokesman Esmaeil Baqaei said diplomatic exchanges with Washington through mediators were continuing. Pakistan's Prime Minister Shehbaz Sharif, serving as a mediator, called for restraint during a meeting with Iran's Interior Minister Eskandar Momeni, urging all sides to "refrain from actions that could further destabilise the region."
Two weeks after fighting resumed between the decades-old adversaries, Trump said Iran would need more than 20 years to recover from the damage inflicted in the Middle East war. "If we left right now, it would take Iran 20, 25 years to rebuild," he said. "We're not finished at all... we're not leaving right now."
