Trump Vows Further Strikes as Iran Hits Gulf Targets and War Cost Jumps to $37.5 Billion

Widening Attacks: Iran Strikes Kuwaiti Plants, Bahrain Sounds Sirens, and Trump Doubles Down

The military confrontation between the United States and Iran escalated sharply on Tuesday, with Iranian forces striking US radar and air-defense installations in the Gulf while also hitting power and water desalination plants in Kuwait—the fourth such assault in as many days. Bahrain activated air-raid sirens after its military intercepted the latest in a series of Iranian attacks on the kingdom, and Jordan’s armed forces confirmed they downed five Iranian drones near Rukban, a strike Iran’s Revolutionary Guards said targeted a compound housing American personnel.

President Donald Trump, meeting Lebanese President Joseph Aoun at the White House, declared the US campaign was “not finished at all” and claimed that if hostilities ceased now, it would take Iran “20, 25 years to rebuild.” The rhetoric was backed by a stark new price tag: Defense Secretary Pete Hegseth told Congress the war has already cost $37.5 billion, up from nearly $29 billion in mid-May, while he pressed lawmakers for an additional $67 billion in supplemental Pentagon funding.

At sea, Iran’s Revolutionary Guards said they stopped two “non-compliant oil tankers” in the Strait of Hormuz, and explosions caused extensive fires on board, state news agency IRNA reported. Simultaneously, Iran-backed Houthi rebels in Yemen threatened a blockade of Saudi ports, a move Trump said he would “take care of.” On the diplomatic front, Pakistan’s Prime Minister Shehbaz Sharif called for restraint during a meeting with Iran’s interior minister, offering to continue acting as a mediator, while Trump pledged to support Lebanon’s efforts to disarm Hezbollah and resume direct flights by US airlines to Beirut, suspended since the 1985 TWA hijacking.

Inside the Escalation: The $37.5 Billion Price Tag, Maritime Threats and Diplomatic Maneuvers

The Soaring Financial Toll of War

Hegseth’s revised estimate of $37.5 billion—a nearly 30% jump in roughly two months—signals that the Pentagon is burning through money far faster than earlier projections suggested. The request for $67 billion in additional funds, on top of the regular defense budget, indicates the administration expects a prolonged, high-intensity campaign. For Congress, this sets up a contentious debate over reallocating resources at a time when other domestic priorities are strained, and raises questions about the sustainability of a conflict with no defined endpoint.

Iran’s Widening Regional Retaliation

The wave of strikes on Kuwaiti power and desalination plants, intercepted drones over Bahrain and Jordan, and attacks on US radar systems show that Iran is deliberately broadening the geographic scope of its retaliation beyond direct US military positions. Targeting civilian infrastructure—water and electricity—in GCC states that host American forces is a calibrated escalation designed to fracture the US-led coalition by making the costs of partnership unbearable for Washington’s Arab allies. The repeated nature of these attacks suggests Tehran has established a sustained operational tempo rather than one-off reprisals.

Houthi Blockade and the Strait of Hormuz

The simultaneous threats to two of the world’s most critical maritime chokepoints—the Strait of Hormuz, where Iranian forces stopped and set tankers ablaze, and the Red Sea, via a Houthi blockade of Saudi ports—constitutes a deliberate attempt to weaponize oil transit. Even a partial disruption could send crude prices sharply higher and force shippers to reroute around Africa, adding weeks to delivery times and millions in insurance costs. The Houthi threat is particularly potent because it extends the conflict to a waterway that carries roughly 10% of global trade, linking the stakes directly to European and Asian energy consumers.

Diplomatic Channels Under Strain

The meeting between Trump and Lebanon’s Aoun reflects a US push to reshape the Levant’s security architecture alongside the Iran conflict, dangling the resumption of direct airline flights as an economic incentive for disarming Hezbollah. However, Aoun’s simultaneous demand for “a full Israeli withdrawal” underscores the fragility of any peace framework. Meanwhile, Pakistan’s mediation offer, while well-intentioned, has so far yielded no tangible de-escalation and highlights the limited leverage of third-party actors when both the US and Iran remain committed to military confrontation.

What the Widening War Means for Energy Markets, Gulf Allies and Defense Contractors

For energy markets and shipping: the Iranian seizure and burning of tankers in the Strait of Hormuz and the Houthi blockade threat on Saudi ports signal an elevated risk of actual supply disruption. Traders and insurers should model scenarios where Hormuz transits are reduced for a sustained period, and where Red Sea routes become hazardous within days, not weeks. Rerouting options around the Cape of Good Hope would add significant time and cost, directly impacting crude and LNG price spreads.

For Gulf Cooperation Council governments: the repeated drone and missile strikes on power and water desalination plants in Kuwait, and the targeted warnings in Bahrain, demand an urgent hardening of critical civilian infrastructure. Given the proven capability to bypass existing air defenses at scale, investments in point-defense systems and rapid repair protocols should be treated as near-term operational priorities, not long-term planning exercises.

For defense contractors and investors: Hegseth’s $67 billion supplemental funding request, layered on the already $37.5 billion spent, points to a multi-year demand surge for munitions, missile defense systems and drone-countermeasure technology. Companies with exposure to the Gulf and Red Sea naval security missions, as well as those supplying Patriot and THAAD components, are likely to see accelerated procurement timelines, though final funding depends on congressional action that remains politically charged.

For US diplomatic and aviation stakeholders: Trump’s conditional offer to resume direct airline flights to Lebanon represents a commercial aviation opportunity that hinges entirely on Hezbollah’s disarmament and Israeli force withdrawals. Airlines and airport operators should treat the timeline as highly uncertain and monitor progress on the political benchmarks set in the Aoun-Trump meeting before committing to route planning.