The cost of Israel’s war with Iran

As the saying goes, war is hell — but it’s also expensive. The conflict between Israel and Iran continues to escalate, driving up the costs. With every volley of missiles fired, sortie launched and bomb dropped, military operations are costing millions of dollars.

The expense of defense systems

One of the most significant expenses is Israel’s Iron Dome defense system. Experts estimate that when Iran fires a wave of missiles, the cost to intercept can range from tens of millions to $200 million a day. For instance, each activation of the David’s Sling system costs about $700,000, while the Arrow 3 system can run up to $4 million for each interception.

It’s challenging to track the number of sorties flown each day, but keeping warplanes like the F-35 airborne is costly, averaging around $10,000 per hour of flight time.

Damage inflicted by Iran

Iran has also inflicted physical damage on Israel. Hundreds of Israeli buildings suffered heavy damage or destruction, resulting in significant repair costs. More than 5,000 people have had to evacuate their homes, with some temporarily housed in state-funded hotels.

While both Israel and Iran have a history of indirect confrontations through proxy forces, their recent exchanges of missile fire and airstrikes signify a more direct conflict. Israel has a variety of targets in mind, including military and nuclear sites, while Iran’s goals are straightforward: maintain power and continue uranium enrichment.

Economic implications of a prolonged war

An estimate from the Aaron Institute for Economic Policy at Reichman University suggests a month-long war with Iran could cost Israel around $12 billion. This has Israeli officials feeling pressured to end the conflict quickly; the longer it drags on, the more expensive it becomes. A former governor of the Bank of Israel remarked that while Israel could manage a short campaign, extending it could have serious economic consequences.