What war in the Middle East is costing the U.S.

Summary

Podcast Summary: Marketplace Morning Report

Episode: "What war in the Middle East is costing the U.S."

Date: March 11, 2026
Host: Sabri Benishore (in for David Brancaccio)
Notable Guests: Elizabeth Troval, Kent Smetters

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Overview

This episode examines the economic and geopolitical costs of the ongoing war in the Middle East, focusing on both global energy disruptions and the rising financial burden of U.S. military involvement. Marketplace reporters and guest experts detail how the conflict is affecting global LNG supplies, intensifying energy competition among nations, and driving up American taxpayer expenses at an extraordinary rate. The conversation provides context for what these developments mean for the U.S. and global economies.

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Key Discussion Points & Insights

1. Disruption in Global Shipping and Energy Markets

• Several cargo ships hit in the Strait of Hormuz, reportedly by Iranian mines.
• The Strait, critical for global oil transport, is effectively blocked to all but Iranian shipping—specifically, to their oil tankers bound for China.
• Implications:
  • Global LNG (liquefied natural gas) market loses a fifth of its supply.
  • Regions worldwide are now in fierce competition for remaining fuel.

Notable Quotes:

• Sabri Benishore [00:18]:
  "All of this has essentially blocked off the Strait to everyone except Iran, which continues to send its own oil tankers to deliver oil to China."

• Elizabeth Troval (with Jameson Coughlin, Natural Gas Intelligence) [01:18]: "You've had such a big chunk of supply taken out, you're probably going to start to see things get pretty rough here by the end of the month, April, May, that's when competition really starts to intensify." — Jameson Coughlin

• Elizabeth Troval [01:30]:
  “Asia has been disproportionately affected by the loss of natural gas... So Asia is now buying LNG that would have been going to Europe. While Europe is trying to refill natural gas inventories that depleted over the winter... they need to refill that storage so that they don't start next winter in this precarious position.” — Lindsey Schneider, RBN Energy

• Elizabeth Troval [02:10]:
  “That would take the form of high prices, prices so high that for poor countries in Asia it may not... simply not make sense to buy that gas. It may not work in terms of the economics.” — Lawrence Resekis, S&P Global Energy

Timestamps:

• Shipping/energy disruption: [00:18]–[02:22]

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2. U.S. Military Costs: Billions and Counting

• No official Pentagon figure, but expert estimates suggest massive initial and ongoing expenses.
• Reported Figures:
  • Washington Post: $5.6B in first two days
  • CSIS: $3.7B in first 100 hours
  • Kent Smetters, Penn Wharton Budget Model: ~$3.5B for first few days, ongoing at $800M per day

Breakdown of Expenses:

• Operating costs (ships, aircraft, personnel)
• Intensive air and naval operations
• High-end strike packages, ammunition, depot-level maintenance

Notable Quotes:

• Sabri Benishore [03:26]:
  "$800 million a day?"

• Kent Smetters [03:28]:
  "Yeah."

• Kent Smetters [03:32]:
  “Certainly the forward costs of the ships that running the aircraft, I mean aircraft, even fourth generation aircraft cost about $25,000 per hour to run... when you put all that together, it comes out to about $800 million a day.”

• Sabri Benishore [04:01]:
  "Does the cost of war per day come down over time or does it just kind of sit there as a constant?"

• Kent Smetters [04:10]:
  "On one hand you have fewer strikes that are happening kind of later on. On the other hand, you have to loiter longer to find some of those targets. What makes this very different from say Iraq is Iraq had quite a bit few boots on the ground, whereas right now our boots on the ground are fairly limited."

Timestamps:

• Interview with Kent Smetters (cost breakdown and future costs): [02:32]–[05:22]

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3. Potential Impact on U.S. Government Borrowing

• Increased war spending could drive up U.S. government borrowing costs.
• Risk of higher interest rates as U.S. federal debt accelerates.

Notable Quotes:

• Sabri Benishore [04:31]:
  "Is there a point at which spending like this pushes up the cost of borrowing for the United States government?"

• Kent Smetters [04:40]:
  "Sure. I mean, that's definitely true for virtually all spending and any deficits. ... The real risk, of course, is that they suddenly go up even more as the market loses confidence and the bond markets in particular loses confidence and really drives up these interest rates."

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Memorable Moments

• “A fifth of global supply has now been taken off the market.” — [00:51], underscores the scale of energy disruption.
• "$800 million a day": The per-day military cost, repeated with a sense of disbelief by the host, puts the expense in stark relief.
• Comparison to previous wars: Smetters highlights how this conflict differs from Iraq by the limited number of "boots on the ground," which may affect long-term costs and strategies.

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Important Timestamps

• Energy market impacts: [00:18]–[02:32]
• Military spending analysis with Kent Smetters: [02:32]–[05:22]
• Discussion of borrowing and economic consequences: [04:31]–[05:15]

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Summary Tone & Language

The tone is factual, measured, and analytically sharp, balancing straightforward reporting ("$800 million a day?") with expert explanation.

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Closing

This episode provides a concise, data-packed briefing on the real-time global and domestic effects of the Middle East war—from supply shocks in LNG markets to mounting U.S. fiscal obligations—arming listeners with essential context for the cascading impact on commodity prices, international competition, and federal debt.

Transcript

[Marketplace Announcer]

This Marketplace podcast is supported by VantageScore. The modern credit score used by nine of the 10 largest banks, over 3,700 companies, and now approved by Fannie Mae and Freddie Mac. VantageScore trended data alternative Data Reduced Risk

[Sabri Benishore]

the Cost of War we'll run the numbers from Marketplace. I'm Sabri Benishore in for David Brancaccio. First, there are reports this morning that several cargo ships were hit in the Strait of Hormuz today. They have not. Sun crews are safe. There are also reports that Iran previously laid a small number of mines in the critical shipping passage, prompting the US to bomb several Iranian mine laying boats earlier this week. All of this has essentially blocked off the Strait to everyone except Iran, which continues to send its own oil tankers to deliver oil to China. This situation has left entire regions of the globe competing to get the fuel they need, including liquefied natural gas. A fifth of global supply has now been taken off the market, Marketplace's Elizabeth Troval reports.

[Elizabeth Troval]

The longer the war continues, the more disruptive it will be to the European and Asian countries that import lng, says Jameson Coughlin with Natural Gas Intelligence.

[Sabri Benishore]

You've had such a big chunk of supply taken out, you're probably going to start to see things get pretty rough here by the end of the month, April, May, that's when competition really starts to intensify.

[Elizabeth Troval]

Lindsey Schneider with RBN Energy says while Asia has been disproportionately affected by the loss of natural gas, this is like a very interconnected global market. So Asia is now buying LNG that would have been going to Europe. While Europe is trying to refill natural gas inventories that depleted over the winter, they need to refill that storage so that they don't start next winter in this precarious position. Eventually, if the war continues, something's gotta give, says Lawrence Resekis with S and P Global Energy.

[Sabri Benishore]

One way or another, demand has to come down to meet the available supply,

[Elizabeth Troval]

and that would take the form of high prices, prices so high that for poor countries in Asia it may not

[Sabri Benishore]

simply not make sense to buy that gas. It may not work in terms of the economics, he says.

[Elizabeth Troval]

Wealthier countries in Europe and Northeast Asia are better situated for higher priced lng. I'm Elizabeth Trofal for Marketplace.

[Sabri Benishore]

As the war continues, we're starting to get a better idea of how much the US Military operation is costing US taxpayers. For more on that, we are joined by Kent Smetters, a professor at the University of Pennsylvania's Wharton School and head of the Penn Wharton budget model. Good morning, Kent.

[Kent Smetters]

Good morning.

[Sabri Benishore]

So we do not have an official estimate on costs from the Pentagon, but a lot of folks are trying to figure it out. Washington Post reported may have spent $5.6 billion in the first two days. The center for Strategic and International Studies said 3.7 billion in the first 100 hours. Does that line up with what your thinking is?

[Kent Smetters]

Our estimate right now is over the first couple days is closer to about the $3.5 billion mark. But having said that, we think the ongoing daily cost is going to be closer to about $800 million.

[Sabri Benishore]

$800 million a day?

[Kent Smetters]

Yeah.

[Sabri Benishore]

What goes into that number?

[Kent Smetters]

Certainly the forward costs of the ships that running the aircraft, I mean aircraft, even fourth generation aircraft cost about $25,000 per hour to run the intensive air and naval operations directly. The high end strike packages, ammunitions, all the depot level maintenance. And when you put all that together, it comes out to about $800 million a day.

[Sabri Benishore]

Does the cost of war per day come down over time or does it just kind of sit there as a constant?

[Kent Smetters]

So on one hand you have fewer strikes that are happening kind of later on. On the other hand, you have to loiter longer to find some of those targets. What makes this very different from say Iraq is Iraq had quite a bit few boots on the ground, whereas right now our boots on the ground are fairly limited.

[Sabri Benishore]

Is there a point at which spending like this pushes up the cost of borrowing for the United States government?

[Kent Smetters]

Sure. I mean, that's definitely true for virtually all spending and any deficits. So in particular, the interest rates that we saw pre Covid, those actually should be the current interest rates that we have today. If it were not for this exploding debt path that we're on, that means borrowing costs in your homes are going to be higher, mortgage rates are going to be higher, and so forth. The real risk, of course, is that they suddenly go up even more as the market loses confidence and the bond markets in particular loses confidence and really drives up these interest rates.

[Sabri Benishore]

Kent Smedders, professor at the University of Pennsylvania's Wharton School and head of the Penn Wharton budget model. Thank you so much.

[Kent Smetters]

Thank you for having me.

[Marketplace Announcer]

This marketplace podcast is supported by VantageScore, the modern credit score used by nine of the 10 largest banks, over 3,700 companies, and now approved by Fannie Mae and Freddie Mac. Vantage Score Trended data alternative data reduced

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[Sabri Benishore]

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[Nancy Marshall Genser]

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[Sabri Benishore]

New York, I'm Sabri Benishore with the Marketplace Morning Report from APM American Public Media.

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