US–Iran War Costs Hit $25 Billion as Oil Prices Surge to $119

The cost of the United States’ ongoing military campaign against Iran has reached an estimated $25 billion, highlighting the scale of the escalating conflict between the two countries.

Global oil prices jumped to around $119 a barrel yesterday on fears of supply disruptions stirred by the crisis with tensions in the Middle East roiling energy markets.

Yesterday, US President Donald Trump insisted that the blockade on Iran will remain in place until it agrees to renegotiate its nuclear programme, signalling a likely prolonged standoff with significant implications for global stability.

The effect was almost immediate in Nigeria, where the Dangote Refinery raised the ex-depot price of petrol to N1,275 per litre, an increase of N75 per litre at the depot, which reflected the increase in crude prices and the attendant supply costs.

The U.S. war in Iran has cost $25 billion so far, a senior Pentagon official, Jules Hurst, said Wednesday in the first official estimate of the price tag for the military’s involvement in the conflict.

With just six months until mid-term elections in which Trump’s Republicans may face an uphill battle to keep their House majority, Democrats are riding high in public opinion polls as they seek to tie the unpopular Iran war with affordability.

Most of that money was for munitions,” Hurst, who is serving as comptroller, told lawmakers on the House Armed Services Committee. Hurst did not say what that estimate of costs included, or whether it included the projected costs of rebuilding and repairing damaged base infrastructure in the Middle East from the conflict.

Rep. Adam Smith, the top Democrat on the House Armed Services Committee, said in a statement responding to Hurst: “I’m glad you answered that question. “We’ve been asking for a hell of a long time, and no one’s given us the number. That’s why.”

The United States began carrying out strikes against Iran on February 28 and the two sides are currently holding a fragile ceasefire. The Pentagon has deployed tens of thousands additional forces to the Middle East, including three aircraft carriers remaining in the region.

Thirteen U.S. troops killed in the conflict, hundreds wounded.

“The disruption of oil and natural gas shipments since the war started has driven up US petrol prices and agricultural products such as fertilizers, adding to the long list of other high consumer prices, a Reuters report said.

Trump’s popularity has taken a hit since the US and Israel launched a war against Iran on February 28, which has caused a spike in petrol prices. A recent Reuters/Ipsos poll found that just 34 percent of Americans approve of the country’s conflict with Iran, down from 36 percent in mid-April and 38 percent in mid-March.

Brent crude meanwhile rose to $119 a barrel on Wednesday afternoon, its highest so far this month and a near-7 percent rise in a day.

Iran has vowed to keep blocking traffic through the Strait of Hormuz in retaliation for the US blockade.

The conflict has effectively shut down the key Strait of Hormuz for weeks, and since the war began oil prices have swung wildly, a BBC report said.

Iran has cracked down hard on shipping through the strait, which normally carries about a fifth of the world’s supply of oil and liquid natural gas, in response to US and Israeli strikes that began some two months ago.

Tehran warned earlier this month it would target any vessel approaching the strait. Then the US said its forces would intercept or turn back ships going to or from Iran’s ports.

BBC Verify analysis suggests at least four vessels tracked leaving Iranian ports seem to have crossed the US blockade line. Oil has fluctuated over the last few weeks but still remains well above pre-conflict levels on a barrel-by-barrel basis.

On 17 April a ceasefire was announced between Israel and Lebanon and the price of Brent crude fell to $90 a barrel. The US announced it would suspend attacks on Iran on 8 April. But it remains well above the pre-war price of a barrel.

But the oil benchmark has been climbing steadily over the last 12 days as the US has kept up its blockade.

Iran’s economy is also in a deepening crisis, with sky-high prices, a declining currency and the threat of oil exports coming to a halt. The annual inflation rate hit 53.7 per cent, according to the Statistical Centre of Iran. The country’s currency, the rial, has slumped to a record low.

Last week the Iranian government said the war had cost some two million Iranians their jobs, directly or indirectly.

Trump urges Iran to “get smart soon” and sign a deal Wednesday after days of impasse in efforts to end the conflict. Trump said in a post on Truth Social the country “couldn’t get its act together.”

The Wall Street Journal, citing U.S. officials, said the president had told aides to prepare for a prolonged blockade of Iranian ports in an effort to pressure Tehran.

Trump decided against restarting bombing or pulling U.S. forces out of the conflict, the other options, because they were considered riskier, the report said. Instead, he chose to keep the blockade, which chokes Iran’s economy and its oil exports.

Iranian officials said Tuesday that the country was able to withstand the blockade, as it was using alternative trade routes.

The World Bank predicted on Tuesday that energy prices will jump 24% in 2026 to their highest since Russia’s full-scale invasion of Ukraine four years ago, if the worst disruptions from the Iran war end in May.

European stocks declined on Wednesday as investors took in a raft of corporate earnings and looked to the US Federal Reserve’s upcoming interest rate decision.

US President Donald Trump said Wednesday he had turned down an Iranian offer to lift the US blockade and open the Strait of Hormuz.

He wants some guarantees first on reining in the Iranian nuclear programme, telling Axios in a phone interview that “they can’t have a nuclear weapon”.

“The blockade is a little more effective than the bombing. They are choking like a stuffed hog. And they will be worse off. “They can’t have a nuclear weapon,” Trump added.

Trump said he liked the effectiveness of the blockade but would not comment on any potential military plans in the interview.

They want to settle, They don’t want me to hold the blockade. “I don’t want to (lift the blockade) because I don’t want them to have a nuclear weapon,” he said.

Meanwhile, the Dangote Refinery has raised its ex-depot price of petrol by N75 per litre in a move that is bound to have a ripple effect on fuel pump prices across the country.

Petroleum price datang shocked the downstream further as it increased its loading price for petrol from N1,200 per litre to N1,275 per litre, while coastal supply prices rose to N1,215 per litre.