The Profiteers of Conflict: Who Benefits From the US-Israel War With Iran?

The ongoing conflict between the United States, Israel, and Iran, escalating since the initial strikes on February 28, 2026, is inflicting widespread pain and disruption. However, beyond the immediate human cost and geopolitical instability, a complex web of economic incentives is at play, with certain actors poised to profit from the crisis. Understanding these beneficiaries is crucial to comprehending the persistence of the conflict and the challenges to achieving a lasting peace.

Energy Market Disruptions and Windfalls

The war’s immediate impact has been felt in global energy markets. Tanker traffic through the Strait of Hormuz has decreased significantly, with reports indicating a roughly 90% reduction. Qatar, a major exporter of liquefied natural gas (LNG), has halted production indefinitely. This disruption has led to a surge in oil prices, exceeding $100 a barrel, benefiting oil-producing nations and companies.

The United States stands to gain as Europe’s reliance on American energy exports increases, a trend already accelerated by the war in Ukraine. Gulf petrostates, particularly Saudi Arabia and the UAE, possess substantial spare production capacity and, while facing costs associated with the conflict, are less exposed to disruptions in the Strait of Hormuz due to existing bypass pipelines.

Russia also benefits from the situation, as higher oil prices divert price-sensitive buyers like India and China away from Gulf suppliers. Notably, the United States has temporarily eased some oil sanctions imposed on Russia in response to its invasion of Ukraine. This move suggests a pragmatic approach to stabilizing global energy markets amidst the escalating tensions.

The Booming Defense Industry

Perhaps the most direct beneficiaries of the conflict are defense contractors. On the first day of the strikes, major US defense firms – Lockheed Martin, Northrop Grumman, and RTX – saw their stock prices rise between 4% and 6%, resulting in a combined shareholder gain of $25–30 billion. In Israel, Elbit Systems briefly became the country’s most valuable listed company, with its shares up 45% since January. European and UK defense stocks also surged against a declining FTSE 100.

Political Considerations and the “Rally ‘Round the Flag” Effect

Wars can provide a temporary boost to incumbent politicians. The timing of the strikes, occurring amidst scrutiny related to the Epstein files, led to a noticeable decline in web searches for that topic, potentially shifting public attention.

Iran’s Internal Dynamics: The Role of the IRGC

Counterintuitively, the conflict may also benefit certain elements within Iran itself. The Islamic Revolutionary Guard Corps (IRGC) controls a significant portion of Iran’s oil exports and has become a dominant force in the country’s economy, controlling sectors like construction, telecommunications, agriculture, and energy. Economic sanctions, intended to weaken Tehran, have inadvertently strengthened the IRGC’s position by eliminating foreign competition and granting it access to informal trade routes and currency controls.

The Fossil Fuel vs. Renewables Paradox

Higher oil and gas prices, while accelerating the case for renewable energy sources, also make new fossil fuel extraction more commercially attractive. This creates a paradox, potentially slowing the transition to a green energy system by redirecting investment back towards fossil fuels.

Addressing the Paradox of Incentives

Breaking this cycle of incentives requires aligning the financial interests of powerful actors with solutions. Potential measures include:

• Windfall Taxes: Implementing a windfall tax on companies benefiting disproportionately from the conflict, similar to the UK’s energy profits levy.
• Emergency Oil Stock Releases: Coordinated releases of emergency oil stocks by the International Energy Agency (IEA) to cap price spikes.
• Strengthening Democratic Accountability: Promoting democratic accountability, independent economic institutions, and a free press to limit the exploitation of wartime popularity by political leaders.
• Accelerating the Green Transition: Prioritizing investment in and development of a green and secure energy system.

The costs of this war are already being felt in energy markets and national budgets. The core challenge lies in the paradox at its heart: those best positioned to end the conflict are often those who stand to gain the most from its continuation.