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On Monday, NATO announced it it shot down a second missile fired toward Turkey, sparking concerns that the Iran war could widen. Oil prices briefly topped one hundred dollars a barrel for the first time in four years, as oil production slows in several Gulf states and traffic through the Strait of Hormuz remains at a near standstill. As the US and Israel continue their attacks, Iran has shown little
sign of changing course. Over the weekend, the country appointed the sun of Ayatola Ali Hamane as the new Supreme Leader.
And it seems to be that there are two critical factors to look at, markets and munitions.
Former US Secretary of State Anthony Blincoln sat down with my co host David Gerrow last week to talk about the factors that could bring a quicker end to the war. Big market losses, he said, could cause President Donald Trump to pull back.
Or munitions. There's really a race on to figure out who expends their munitions first and fastest.
We can be clear with the American people that this is not a fair fight.
In an interview on CBS's sixty minutes. Defense Secretary Pete Hegseth said the US and Israel's military resources can overwhelm Irans.
The ability for US to be up over the top and hunting with more conventional munitions, gravity bombs five hundred pound, one thousand pound, two thousand pound bombs on military targets that we haven't even really begun to start that effort of the campaign.
As the costs of the war continue to mount, the US's ability to stay in this fight depends on more than the Trump administration's appetite to continue. It might also come down to weapons. I'm Sarah Holder, and this is the big take from Bloomberg News today. On the show the munitions powering each side of this conflict, how much which they cost and who could run out first? I sat down with Bloomberg's Global Defense editor Jerry Doyle and
Bloomberg Economics Defense lead Becca Wasser to find out. Jerry and Becca, thank you so much for joining us. As the war in Iran escalates, there have been mounting consequences. There's the human toll. More than a thousand Iranians have died, according to Iranian officials. Seven US service members have died as of this taping attacks on oil reserves have sent oil prices mounting. But today we're going to talk about weapons because they can be a useful proxy to understand
how and how quickly this war might end. Jerry, you wrote in a story last week that just three days into the conflict, the Iran war has become attritional. What did you mean by that?
Whoever run out of their crucial ammunition first, it's going to be in a much worse position as Iran burns through with missile inventory firing them. The US and Israel destroy those missiles on the ground and destroy launchers on the ground, and at the same time balancing the other side of it, of the US and Israel and its partners using large numbers of air defense missiles to protect themselves.
How much does one of those patriot air defense missiles that the US and Israel are using cost? And what's the life span of this technology.
It's a missile, so you fire at once and it's done, and they cost about four million dollars each, maybe maybe a few hundred thousand dollars more. So you can kind of see the mismatch between using a relatively expensive weapon like that to defend against something smaller and cheaper like the sort of head one thirty six one way attack drone basically rudimentary, cheap, slow cruise missiles that Iran has
and is launched in large numbers. If you use your air defense missile to defend against the system like that, you're losing the money battle.
And Becca, you've been crunching the numbers on this, can you walk us through what we know about the supply of munitions on either side and how we know what we know?
All right, so let's start with Iran. Iran, we don't have a very good sense of their missile and drone stockpiles, and part of that is by design. Last numbers that we have is Iran had about two thousand or so ballistic missiles prior to the Twelve Day War and that some of those were fired in great number, and then it has tried to rebuild in that interrect num period. In terms of drones, we don't have good data on what Iran drone production rates are, specifically shaw heads, but
we do have some decent data. On the Russian side, they've been able to crank out upwards of four hundred a day. So if you assume that Iran has a very similar production rate. Iaine that their drone arsenal is quite large. Shifting over to the US and its golf partners, the Golf partners have spent years and years buying US weaponry,
including a lot of very expensive air defense systems. We don't have a good sense of their stockpile numbers, but we have heard that they are running low on some of the precious air defense interceptors that they've been using, as Jerry said, to take out the missile and drone thread emanating from Iran since the start of this conflict. There's just never enough air defense systems to go around.
There are never enough missiles and interceptors. So we don't have a good sense of stockpile numbers because they are classified, but at the rate at which they've been used, you could imagine that some of those are running a little bit low. That doesn't mean that the US is running out, but it does mean that the US may need to
pull them from other theaters if possible. When you look at some of the long range weapons, they're pricey, and those have been used to great effects already in this conflict, and the US is trying to shift away from using those standoff weapons to now using closer range stand in weapons in part because those joint attack munitions are more plentiful. But that requires the US to be able to get a little bit closer in order to drop these largely by air.
Maybe to put a sort of a quantifiable point on that, right, So if the US used to say two hundred and fifty Tomahawk missiles in the opening days of this operation, so each of those is going to cost let's sort of ballpark at a million dollars each day, probably a.
Little bit more than that, one point seven.
One point seven, all right, so let's say two let's just call it an even two million. So that's five as a half billion dollars spent just on the munitions, right, and we currently manufacture something like ninety Tomahawks a year, So it would take you two and a half years to replace the Tomahawks that were fired over the course of one day at the cost of half billion dollars.
What we're talking talking about here in terms of the cadence of how many munitions have already been deployed just you know, ten days into this war, is this typical?
Becca.
I think the intensity of US and Israeli strikes is quite notable. The United States has said that they alone have conducted over three thousand strikes. You also have the Department of Defense saying that they have used more air power in the first few days at this conflict than they did in the opening days of the war on Iraq. So you know, if you look at this historically, it's a massive use of air power, it's a massive use
of missiles. It's a massive use of American force, which leads to the question of how long does this go on?
Becca, What are the plans to replace weapons that have already been used in this conflict? Is production ramping up and how quickly could that happen?
Production is ramping up, but I wouldn't say that it's quick. More recently, there have been efforts to try and scale missile production. Missiles and munitions are very volatile in terms of their procurement, and the thing that usually ends up on the cutting room floor had traditionally been munitions. I think, you know, Ukraine was a wake up call for the United States and that it needed to get after this problem.
So we did see some efforts there. More recently, we have this announcement of a potential supplemental for munitions to try and ramp up supply of some of the most critical munitions, including those air defense interceptors that have been used like Patriot THAD, as well as the standard missile series. But those are going to be longer term efforts. When they're saying that they're going to ramp production, we're looking at you know what, the White House says, quadrupling it,
but that's not until the twenty thirties. So it's going to take a while for that to happen, in part because it's a lengthy endeavor and there's a lot of bottlenecks that exist in the munition's production process.
And what about on the Iranian side, how is Iran thinking about replacing munitions as they run through them?
Jerry, it's very difficult to tell from the outside what
they're able to produce. Most of their production facilities at this point in the war are going to be in places where you can't see them easily from the satellite, maybe you know, underground, buried in a mountain, disguised as something else, and it's going to be much easier for them to replace the cheaper, lower an ammunition they're using like the head, you know, sort of these small cruise missiles, which you know are just a small step up from
being a remote control airplane with an artillery shell strap to it. Missiles are obviously much more difficult to produce in terms of materials, in terms of the expertise the machinery that you need to do that and get them to work well. So it's makes me as very unlikely that Iran will be able to generate more missiles while the war is going on.
It seems like what you're both describing is that the US is using missiles like Patriots that take lots of time millions of dollars to produce to shoot down drones like the show Heads that are cheap and quick to produce. I'm wondering whether that poses a sustainability challenge for the US here or gives Iran a leg up.
It's a sustainability challenge in the sense not that the US is going to run out of munition, even air defense missiles full stop. It's more that they would have to confront strain on their inventory that would post them to pull from other places that are very important to the US military es, such as the Indo Pacific, where you have China, which is the world's largest conventional billistic missile inventory, with US bases obviously in Korea, Japan, Guam
under threat from those missiles. So that would be the danger for the US side that they start having to rob Peter to pay Paul in order to keep their air defenses in the Middle East robust.
After the break, Bloomberg's Global Defense editor Jerry Doyle and Bloomberg Economics Defense lead Becca Wasser on what we know about the economic cost and the opportunity cost of the war so far. Becca, I'm hoping you can help us put the overall cost of this war into context. How much has this been costing the US already, even in its first few days.
So I haven't crunched the numbers yet, but some smart analysts in DC already have, and we are looking at billions billions of dollars just in pure operational cost alone. We don't have numbers of what has been expended yet, and once we do, I think we're going to see an enormous cost. But I think it's worth remembering that the human cost of war is probably the greatest cost. Already we are seeing civilians in Iran taking the brunt
of this conflict. We are also seeing human loss of life throughout the Gulf and elsewhere in the Middle East as well. And we've also seen now seven US service members killed, which is very, very notable for the United States. So, you know, we have the financial costs, but war is not just about financial cost and even in an attritional war, materiel is not going to be the most decisive factor
at the end of the day. The decision to end a war is often political, and sometimes it's more on the human cost that actually brings folks to the table.
I mean, on how long might it take for those costs, those costs of human lives and those billions of dollars that have already spent on this war to filter into the political arena and make a difference in terms of how the administration is thinking about continuing this war.
To a certain extent, some of the war is already funded through the Pentagon Defense Department budget that was approved last year for twenty twenty six. Additional cost like the you know, fifty billion dollars for additional munitions and operation. That stuff is it's going to have to be paid for somehow, and I'm sure that senators and representatives in Congress are going to make hey one way or the other about who's paying for it.
I mean, this obviously is not the only conflict that the US has waded into this year. Right We've seen Trump Mountain Operation to top of the leader of Venezuela. He's made noises about Greenland and Cuba, which is currently under an oil blockade. So politics and costs aside from a perspective of troops, personnel, weaponry, you know, how many more battles can the US military sustain? And is that something that weighs on Trump or the US right now?
I mean I can say that, you know, twenty five to thirty years ago, the US military was sort of the idea that it was designed to fight two wars at once, much as it did in World War Two, sort of fighting in the Pacific and fighting in Europe. That's not really the case anymore. Sort that shifted to we're going to be able to fight one war at a time and deter another war.
And I think all of this speaks to a longer readiness challenge for the US military. Already, we're seeing such wear and tear on equipment, we are seeing forces, you know,
overseas or out at sea for extended deployments. We're seeing a ton of weapons being used that aren't quickly and easily replaced, and that just means that the United States might be less prepared to deal with unforeseen crises, to mount another operation, say against Cuba or elsewhere, or even in the long term, be able to deter and if needed, defend against potential aggression in the Indo Pacific if something were to pop off with China.
I mean, as we talk about other conflicts, you know, the Russia Ukraine war is waging on. Ukraine has been seeking US missiles for its defense, and it recently came up with a proposal for a swap of sorts to help the US defend against Iran. I'm wondering if you could talk about what they're offering and how that fits into this conversation.
So Ukraine has sort of helped develop this theory of layered air defenses for protecting against the drone that that until the Iran War we hadn't really seen at large scale anywhere else. What Zelensky has proposed publicly is that Ukraine would help out with some systems at eight users
to intercept Jones cheaply. They can provide that sort of hardware and that sort of equipment, but also the expertise they have and sort of arranging and layering drone defense, because this is some things is a problem that they've printed every day for years and gotten pretty good at solving. And Ukraine has also in exchange, asked for more airfense missiles, specifically Patriot Pac three missiles, which are being burned through in the Middle East right now.
We talked at the top about the Iran war becoming attritional, So I want to wrap up this conversation by asking Becca, from where we sit today, which side is positioned to outlast the other in this war?
If you're judging by pure hardware alone, the answer is probably the United States, based on it's much larger military, it's much larger arsenal, and everything that it could bring to bear in this conflict. But at the end of the day, war is not just about the number of missiles that you have or the capabilities. It really does come down to will and will to fight, and for Iran this is an existential one. So you can imagine that even if the US could outlast Iran, in terms
of weapons and capabilities a number of forces. Iran is going to continue this for as long as they possibly can.
It sort of depends on what the operational goal is for the US. Is it regime change. If that's the case, then by that standard, maybe Iran ends up on top. If their campaign continues and they're saying that the goal is for Iran to be completely disarmed, then maybe you could come up with some sort of a theory of victory for that Iran runs out of weapons or its stockpiles are destroyed, then maybe you can say the US wins that scenario. Melli Becka was saying, it's sort of
appearing victory. You know that the US would have burned through a tremendous amount of hardware. It would have suffered, you know, casualty both dead and wounded. It would have inflicted quite a bit of destruction and death on Iran, destabilized the region, and sort of destabilize the oil markets. If it comes to a scenario where the US stops bombing because around that shooting, then it really hard to view that in any terms other than sort of a stalemate.
And then it's about rebuilding and trying to repair all the damage not just in the Middle East but around the world.
Yeah, and I think if you look at the historical record of protracted conflicts, you have these intense periods of fighting followed by bouts of reconstitution and where you're trying
to rebuild your forces before restarting the fighting again. And that's a really scary thing to think about because that puts the US and Iran potentially in a cycle of conflict for a very long time and very much invokes the idea of some of the forever wars that Trump campaigned against and said that he wouldn't get involved in in the Middle East.
I think it's also important to look again at the outcome. What is a goal that the US is trying to bring about with this military action. You can be completely dominant, you can destroy the other guy's military completely, but if you aren't achieving an effect in whatever effect it is you're going for, then you're just fighting.
Operational success is not the same as strategic success.
This is the Big Take from Bloomberg News. I'm Sarah Holder. To get more from The Big Take and unlimited access to all of Bloomberg dot com, subscribe today at Bloomberg dot com Slash Podcast offer, thanks for listening. We'll be back tomorrow.