When the United States and Israel launched coordinated strikes across Iran on 28 February 2026, policymakers in Washington and Tel Aviv appeared confident that overwhelming technological superiority would allow them to dictate the course of the conflict…
The United States fields the most powerful military in the world and spent roughly $997bn on defence in 2024, according to the Stockholm International Peace Research Institute. Israel’s military spending reached $46.5bn in the same year, one of the highest levels of defence expenditure per capita anywhere in the world. Against those figures Iran’s military budget appears modest. Yet within days of the first strikes the conflict had begun exposing a very different reality. Rather than confronting American and Israeli forces in a conventional military contest, Tehran has responded with a strategy designed to attack the economic and technological foundations of the Western security architecture itself.
The result is a confrontation that increasingly resembles a war of financial attrition. Iran has relied heavily on inexpensive drones, dispersed missile launch networks and targeted attacks on radar installations that underpin missile-defence systems across the Middle East. Those tactics exploit a structural vulnerability that has long existed within advanced military systems. The defensive weapons designed to protect modern armies and cities are extraordinarily expensive to operate. When an adversary can manufacture weapons that cost a few tens of thousands of dollars while forcing defenders to fire interceptor missiles costing millions, the economics of the conflict begin to shift rapidly.
The political tone of the war was set during the opening wave of U.S. and Israeli strikes. Among the sites hit was the Shajareh Tayyebeh Primary School in the southern Iranian city of Minab. Missiles collapsed large sections of the building while classes were underway. Iranian authorities reported that between 168 and 180 people were killed, the overwhelming majority of them schoolchildren attending lessons at the time. Images from the aftermath showed rescuers pulling backpacks, notebooks and children’s clothing from the rubble while families searched desperately for missing daughters. Officials in Washington insisted American forces would not deliberately target a school and said the incident was under investigation. Inside Iran, however, the strike quickly became a defining symbol of the conflict and hardened public opinion behind the government’s promise of retaliation.
Within days Tehran’s response began to reveal the logic of its strategy. One of the most significant strikes occurred not in Israel but in Qatar, where Iranian missiles hit infrastructure connected to Al Udeid Air Base, the largest American military installation in the Middle East. Satellite imagery later showed damage to a massive early-warning radar believed to be an AN/FPS-132 system estimated to cost roughly $1.1bn. Such radars form the sensory backbone of the American missile-defence architecture. They detect launches across thousands of kilometres, track trajectories and transmit targeting data to interceptor systems that must calculate interception paths within seconds. Even partial disruption of a radar of this scale can degrade the effectiveness of defensive networks protecting U.S. bases and allied territory across the region.
That strike illustrated a central element of Iran’s response. Rather than simply launching missiles toward Israeli cities, Tehran appears to be targeting the surveillance infrastructure that allows missile-defence systems to function. Radar installations, communications nodes and command systems represent some of the most sophisticated and expensive components of the Western security architecture. Damaging them forces defenders to operate with reduced warning times and less reliable tracking information, potentially undermining the effectiveness of entire defensive networks.
Israel’s defensive architecture is one of the most complex ever constructed. It combines multiple layers of interception technology designed to deal with threats at different ranges. Short-range rockets are intercepted by Iron Dome. Medium-range threats are handled by David’s Sling. Long-range ballistic missiles are targeted by Arrow 3 which destroys incoming warheads outside the atmosphere. American systems reinforce these layers across the region including THAAD batteries and the Patriot missile system deployed at bases throughout the Gulf. Behind them lies an extensive radar network stretching across Israel and the Middle East including installations near the Negev Nuclear Research Center capable of detecting missile launches across large parts of the region.
Iran’s retaliatory campaign has relied heavily on drones derived from the Shahed-136. These propeller-driven aircraft carry an explosive payload and relatively simple navigation systems. Their strategic significance lies not in their sophistication but in their cost. Analysts estimate that a Shahed-type drone can be produced for roughly $30,000 to $35,000. The interceptor missiles used to destroy them cost vastly more. A Patriot PAC-3 interceptor costs roughly $3.7mn, while THAAD interceptors can cost as much as $12.7mn each. Every drone launched therefore forces defenders to decide whether to expend a missile costing millions of dollars to destroy a weapon that cost tens of thousands to produce.
The imbalance becomes even more dramatic when large numbers of drones are launched simultaneously. According to estimates by the Center for Strategic and International Studies, interceptor launches during the first 100 hours of the war alone may have cost up to $3.7bn. Even when every interception succeeds, the economics of the exchange may still favour the attacker. Iran can manufacture large numbers of relatively cheap drones while forcing its adversaries to expend vastly more expensive defensive missiles.
Iran’s retaliation has also extended across the network of American bases in the Middle East. Missiles and drones have struck installations in Bahrain, Kuwait, United Arab Emirates and Iraq. Among the most significant targets was the headquarters of the United States Fifth Fleet in Manama. Satellite imagery suggests several installations suffered structural damage. The strikes transformed the vast network of American bases across the region into a series of fixed targets and forced Washington to devote additional resources to defending facilities scattered across thousands of kilometres.
For the governments that host these bases the war has exposed a difficult political reality. Countries such as Qatar, Bahrain, Kuwait and the United Arab Emirates allowed the United States to establish major military facilities on their territory in exchange for security guarantees against regional threats. Yet those same facilities have now turned their territory into the frontline of a war they did not initiate. In several countries videos circulated online showing crowds cheering when Iranian missiles struck American installations or embassies, reflecting longstanding resentment toward foreign military presence in the region.
The strain on missile-defence systems is also being felt far beyond the Middle East. Reports suggest the Pentagon has considered relocating Patriot systems originally stationed in Asia to reinforce defensive coverage around Israel and U.S. bases in the Gulf. Moving a single Patriot battalion from the Pacific to the Middle East previously required 73 cargo flights, illustrating the enormous logistical burden involved in shifting advanced air-defence systems between theatres. Such redeployments have raised concerns about the security of U.S. allies in Asia including Taiwan. If American missile-defence resources are tied down in the Middle East, rival powers could potentially test Washington’s commitments elsewhere.
Naval forces have also become deeply involved in defending Israel. U.S. destroyers equipped with advanced radar and interceptor missiles have repeatedly been used to shoot down incoming threats, providing an additional defensive layer beyond land-based systems. Yet the proliferation of inexpensive drones is beginning to challenge the traditional dominance of large surface warships costing billions of dollars to build. Military planners increasingly warn that coordinated drone swarms could overwhelm naval defences, particularly when attacks combine drones with cruise missiles launched simultaneously from different directions.
Iran’s ability to sustain missile launches reflects years of preparation. Over the past decade Iranian officials have repeatedly unveiled what they describe as underground “missile cities,” vast tunnel networks carved into mountains where missiles and launch vehicles can be hidden from air strikes. Mobile launch vehicles can emerge from these tunnels, fire missiles and return underground before retaliatory strikes arrive. The system reflects a doctrine of dispersed warfare designed to ensure that Iran retains the ability to launch missiles even under sustained bombardment.
While missiles and drones dominate the headlines, the conflict is also sending shockwaves through global energy markets. Oil prices surged from roughly $65 per barrel to nearly $90 within days of the war’s outbreak as traders began pricing in the risk of disruption to Gulf exports. Officials in Qatar warned that if the conflict continues for several weeks the resulting energy shock could slow economic growth around the world and disrupt industrial supply chains.
At the centre of these fears lies the Strait of Hormuz. According to the U.S. Energy Information Administration roughly 20 million barrels of oil per day pass through the strait representing about 20 per cent of global petroleum consumption. More than 20 per cent of global liquefied natural gas trade also travels through the same corridor. Even partial disruption of this route can have profound consequences for the global economy because energy prices feed directly into the cost of industrial production and international trade.
The strategic implications of the war are also being debated among military analysts who question whether the campaign launched by the United States and Israel has a clearly defined political end state. General Sir Richard Shirreff, the former deputy supreme allied commander of NATO in Europe, warned that the conflict bears many of the hallmarks of earlier interventions in the Middle East that were launched without a clear strategy for what would follow the initial military phase. In his view the application of large-scale military force may be operationally impressive, but military success alone does not determine the outcome of wars fought in complex societies where political legitimacy and public sentiment ultimately shape the long-term stability of any settlement.
Shirreff argued that wars conducted without a coherent political strategy risk leaving behind conditions that are even more unstable than those they were intended to resolve. Drawing parallels with previous Western interventions in the region, he described the current campaign as resembling “yet another war of choice with no clear strategy and no understanding of the cultural implications of what is being done,” warning that the destruction of existing power structures without a credible political alternative can produce prolonged instability and conflict.
Ultimately the most revealing aspect of the conflict may lie not in the sophistication of the weapons being used but in the economics of the confrontation itself.
Iran’s strategy appears designed to transform the technological superiority of the United States and Israel into a financial liability. Cheap drones can exhaust expensive interceptor missiles, attacks on radar installations can degrade billion-dollar surveillance networks and disruptions to global energy markets can raise the cost of war for the entire international economy.
In a confrontation where one side spends millions of dollars to intercept weapons that cost thousands to produce, the balance of power may depend less on which system is more technologically advanced than on which economy can sustain the arithmetic of attrition the longest.
