From dwindling missile stockpiles to billion-dollar daily burn rates, the conflict is revealing a fundamental imbalance: modern warfare is consuming weapons far faster than the world can produce them.
A war that is burning through stockpiles
Within days of the conflict escalating, the strain on global inventories has become evident.
German defence major Rheinmetall said on March 6 that the war validated its plans to rapidly expand missile production, explicitly acknowledging that Western manufacturing capacity is insufficient.
The company is now building new missile and rocket engine facilities in Germany and Spain, but these are only expected to come online by 2027, which is far too late to address immediate shortages.
By March 19, the situation had worsened dramatically. Rheinmetall CEO Armin Papperger warned that stockpiles are nearly empty across Europe, the US and West Asia, particularly for interceptor missiles used in air defence systems.
His warning was stark: if the conflict continues for even another month, global inventories of key interceptors could be exhausted.
The scale of consumption: billions spent in days
The pace at which munitions are being used is unprecedented in recent conflicts.
According to estimates from the Center for Strategic and International Studies, the US spent $12.7 billion in just the first six days of the war, with costs rising by roughly $500 million per day.
A significant portion of this is driven by missile usage
Over 300 Tomahawk missiles were fired in the early days of the war, each costing about $3.5 million.
Total Tomahawk cost alone: $1.2 billion
Offensive strike munitions: $5.5 billion
Air defence (THAAD, Patriot interceptors): $5.7 billion
The asymmetry is striking. Iran’s response included 2,500 drones and missiles, many of which are far cheaper to produce.
This has forced the US and its allies to use high-cost interceptors against low-cost threats, a dynamic that is rapidly depleting inventories.
The weapons in play and who makes them
The conflict has drawn on one of the most sophisticated arsenals ever deployed in a regional war.
The US military’s “Operation Epic Fury” has used more than 20 weapon systems across air, sea and land:
Missiles & defence systems:
Tomahawk cruise missiles (long-range strike)
Precision Strike Missile (PrSM) via HIMARS
Patriot missile systems and THAAD interceptors
Aircraft & strike platforms:
B-1 bombers, B-2 stealth bombers
F-15, F-22 Raptor, F-35 Lightning II fighters
Drones:
MQ-9 Reaper (high-cost, up to $40 million per unit)
LUCAS low-cost drones ($35,000), signalling a shift toward expendable systems
Naval and surveillance systems:
Aircraft carriers, destroyers with Aegis systems
AWACS, electronic warfare aircraft, reconnaissance platforms
These systems are produced by a handful of dominant global defence contractors
Lockheed Martin → F-35, THAAD, HIMARS, missiles
RTX → Tomahawk, Patriot systems
Northrop Grumman → B-2 bombers, radar systems
Boeing → F-15, B-1, surveillance aircraft
L3Harris Technologies → avionics, ISR systems
General Atomics → MQ-9 Reaper drones
Huntington Ingalls Industries → aircraft carriers
SpektreWorks → LUCAS drones
On the Israeli side:
Rafael Advanced Defense Systems → Iron Dome
Israel Aerospace Industries → missiles, drones
Elbit Systems → electronics, UAVs
Iran, meanwhile, relies on a mix of imports and domestic production, sourcing technology from Russia, China and North Korea while scaling output through reverse engineering and local manufacturing. Notably, just today, Iranian authorities have said that missile production is continuing and that there is no shortage of missiles despite the ongoing war.
A production problem years in the making
Industry experts say that the current shortage is not just a result of the war. It reflects structural weaknesses in global defence manufacturing. For decades, Western defence industries prioritised efficiency over scale, maintaining lean production lines suited for peacetime demand. The sudden spike in consumption has exposed the limits of this model.
Even when governments push for higher output, ramping up production is slow due to complex supply chains (semiconductors, propulsion systems, explosives), long manufacturing cycles for advanced weapons, and limited skilled labour and specialised facilities.
This is why companies like Rheinmetall are investing in new plants, but with multi-year timelines, not immediate relief.
A supply chain war: the Hormuz factor
The conflict is also disrupting critical supply routes. A United States Military Academy analysis highlighted that any disruption in the Strait of Hormuz could strangle the US defence industry by cutting off access to key raw materials such as copper and chemicals used in munitions production.
This introduces a second-order risk: war → commodity disruption → defence production bottlenecks.
Who dominates global defence production?
The global arms industry is heavily concentrated.
According to the Stockholm International Peace Research Institute: The top 100 defence firms generated $679 billion in revenue (2024).US companies alone accounted for $334 billion (50%), followed by China ($88 billion), UK ($52 billion), Russia ($31 billion), France ($26 billion).
The US dominates not just spending, but also industrial capacity and technological leadership, with 39 companies in the global top 100.
Defence budgets: already massive, now rising further
The war is accelerating an already upward trend in global military spending.
Current defence budgets (approximate):
USA: $1 trillion (targeting $1.5 trillion by 2027)
China: $300 billion
Russia: $110–120 billion
UK: $70–75 billion
Israel: $25–30 billion
Iran: $10–15 billion
Notably, The US is now seeking an additional $200 billion in emergency funding to replenish stockpiles and expand its industrial base, which far exceeds the cost incurred so far in the war.
But, the economics of modern warfare is breaking down
At the heart of the crisis is a simple mismatch:
Interceptor missile: $1 million–$3+ million
Drone: $10,000–$50,000
Using expensive missiles to shoot down cheap drones is financially unsustainable. Even advanced militaries are being forced into a cost trap where defence becomes prohibitively expensive over time.
This is already driving a shift toward low-cost drones and loitering munitions, anti-drone artillery systems, electronic warfare and jamming, and future technologies like directed energy weapons.
What happens if the war drags on?
If the conflict turns into a prolonged engagement, several trends are likely:
1. Severe supply shortages – Missiles, particularly interceptors, could become critically scarce, forcing rationing or alternative defence strategies.
2. A global defence capex supercycle – Governments will significantly increase spendingà not just on weapons, but on manufacturing capacity as well.
3. Multi-year order visibility for defence firms – Companies like Lockheed Martin and RTX could see sustained revenue growth driven by replenishment orders.
4. Shift in warfare doctrine – The war is accelerating a move away from high-cost precision systems toward scalable, cost-effective warfare models.
The bottom line
The Iran war is not just depleting weapons – it is exposing the limits of the global defence industrial system.
Stockpiles are running low, production cannot keep pace, and costs are spiralling. What emerges next is likely to be a fundamental reset of defence economics, marked by higher spending, expanded manufacturing, and a rethinking of how wars are fought.
In that sense, this conflict may be remembered not just for its geopolitical consequences, but for triggering the next global defence supercycle.
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