Oil at $80, Where Will $80 Trillion War Funds Come From? international
The Iran war, which began with U.S. and Israeli airstrikes, is showing signs of expanding into ground combat as both sides brace for a war of attrition. Predictions are emerging that war costs will skyrocket. Iran has signaled its resolve for retaliation by nominating the late Supreme Leader Ayatollah Seyyed Ali Khamenei's second son as his successor, drawing strong objections from President Donald Trump. International oil prices, which briefly stabilized on the 4th (local time), are surging again. Prices have already reached $80 per barrel, approaching major news outlets' forecasts that they could exceed $100 in the long term. Retail fuel prices in Korea and other countries are already rising in succession, increasing the burden on ordinary citizens.
**'Outnumbered' U.S. Forces Deploy Kurds for Ground Combat... Iran Depleting Missiles**
The U.S., Israel, and Iran continued fighting across the Middle East for a sixth day on the 5th. On the 4th, the U.S. sank an Iranian naval frigate with a submarine torpedo attack in the Indian Ocean near Sri Lanka. U.S. Secretary of Defense (War) Pete Hegseth warned at a briefing: "America is winning decisively, destructively, and mercilessly. We will rain death and destruction from the skies all day."
According to the Financial Times, the U.S. and Israel are executing a three-phase operation to bring down Iran's theocratic regime and its core infrastructure. Phase 1 involves eliminating Iranian leadership; Phase 2 targets destroying Iran's ballistic missiles, drones, and air defense systems. Phase 3 is the difficult part: dismantling the Islamic Revolutionary Guard Corps (IRGC) and Basij militia. According to the Wall Street Journal, Israeli forces have primarily conducted airstrikes on Iranian security authorities that recently suppressed anti-government protests, aiming to pave the way for popular uprising. Israel has also deployed ground forces in combat against Lebanese militant group Hezbollah, which has been attacking Israel with Iranian support.
Reports emerged that Kurdish forces have joined hands with the U.S. and Israel to launch ground operations inside Iran. According to Fox News, thousands of Kurdish troops entered Iran from Iraq and began ground attack operations. The Kurds are an Iranian mountain people of approximately 30-40 million residing across Turkey, Iraq, Iran, and Syria—the largest ethnic group without a nation. Having long faced discrimination and oppression in Iran, the Kurds view this conflict as an opportunity to gain autonomy. The prevailing analysis had been that limited U.S. troop numbers in the Middle East would make it difficult for America to wage ground war for regime change. This explains why President Trump has encouraged popular uprising in Iran since the war began.
CNN reported that the CIA is coordinating operations with Kurdish forces to expand anti-government protests in Iran. In response, Iran struck Kurdish organization headquarters in Iraq's Kurdistan Autonomous Region with missiles. It also successively attacked Amazon Web Services data centers in the UAE and Amazon's largest Middle East data center in Bahrain. The problem is that missile stockpiles are depleting rapidly. U.S. Joint Chiefs of Staff Chairman Dan Caine said at a briefing: "The number of ballistic missiles Iran has launched has decreased 86% compared to the first day of combat. In the last 24 hours alone, it decreased 23%."
**Trump Furious Over Khamenei's Son as Successor... U.S. May Face Additional War Costs Amid Astronomical Fiscal Deficit**
Amid these circumstances, Iran has begun discussing electing Supreme Leader Khamenei's second son as successor—in other words, signaling intent to strengthen the theocratic system Khamenei built. The New York Times reported on the 3rd, citing Iranian officials, that the constitutional body that elects the supreme leader deliberated on selecting Mojtaba Khamenei as successor. Born in 1969, Mojtaba is a behind-the-scenes power broker riding his father's influence. He is considered a hardliner with tremendous influence within the Revolutionary Guards and intelligence agencies. Ynet, the online news portal of Israel's largest daily Yedioth Ahronoth, estimated the Supreme Leader Khamenei's wealth at $100-200 billion.
Regarding this, President Trump said in a phone interview with Axios on the 5th: "I should be involved in that appointment, as I did with Interim President Delcy Rodriguez of Venezuela." Interim President Rodriguez was vice president when President Nicolás Maduro was ousted by U.S. forces. President Trump said: "Iran is wasting time. The Supreme Leader Khamenei's son is a lightweight." He added: "The Supreme Leader Khamenei's son is unacceptable," warning that if Iran installs a leader who continues Khamenei's policies, war would be inevitable again within five years. In an interview with Politico, Trump emphasized: "The reason the father didn't hand the position to his son is because he's considered incompetent. We will ensure someone who will build Iran excellently without nuclear weapons takes that position." On the 4th, Trump had also said: "Everyone who seems to want to become Iran's leader will ultimately meet death."
As the war shows signs of lasting longer than expected, concerns about astronomical costs are rising. According to the U.S. Treasury, the federal government's total national debt reached $38.51 trillion (approximately 53,000 trillion won) in January. Last year's U.S. trade deficit totaled $901.5 billion, and the Supreme Court's recent ruling against reciprocal tariffs may increase that burden this year. The situation may require additional debt for war when finances are already strained. At a Medal of Honor ceremony at the White House on the 2nd, President Trump said in his first public address since the Iran war began: "I expected the Iran war to take 4-5 weeks, but we have the capability to sustain longer."
Politico reported that Republican House Speaker Mike Johnson said on the 4th that if the administration requests spending approval, he would "pass additional spending legislation at the appropriate time." Reuters also reported that Deputy Secretary of Defense Steve Feinberg has prepared a request for approximately $50 billion (about 74 trillion won) in additional budget to replenish weapons stockpiles depleted by recent armed conflict, potentially to be released on the 6th. When asked whether Congress could pass the $50 billion supplemental budget, Speaker Johnson replied: "We're waiting for the White House and Defense Department's position, but we're having open discussions on that matter." House Majority Leader Steve Scalise said at a congressional briefing by Secretary of State Marco Rubio and others: "The possibility that additional budget may be needed was raised, but it's still early in the combat and there has been no official additional budget request from the Defense Department."
Allison McManus, director at the progressive think tank Center for American Progress (CAP), stated in a report: "The Trump administration has started a reckless war of choice in the Middle East. This is already estimated to have cost American taxpayers over $5 billion (about 7.4 trillion won)." McManus specifically noted that military asset deployment including fighter jets and missiles disclosed by the Defense Department alone may have cost over $4 billion. She estimated approximately $630 million was spent just on repositioning troops and equipment to the Middle East. She also estimated losses of approximately $351 million from an incident where three U.S. F-15 fighter jets were shot down by friendly fire from Kuwait. If the additional budget request materializes, war costs would reach at least $80 billion (approximately 118 trillion won).
**Oil Tanker Strike Explosion... Prices May Surge Again**
Concerns that oil prices may surge to triple digits are also growing. According to the U.S. Energy Information Administration (EIA), as of the 5th, West Texas Intermediate (WTI) crude for June delivery closed at $80.19 per barrel, up $1.02 (1.29%) from the previous day. Brent crude for July delivery on London's ICE Futures Exchange also rose $1.15 (1.37%) to $85.04 per barrel. There were signs of stabilization on the 4th when prices fell 0.53%, but they rose again amid the uncertain war situation.
Reuters reported that on the 5th, an oil tanker carrying Iranian crude caught fire and exploded after being attacked by missiles from an unidentified aircraft in the Strait of Hormuz. The tanker reportedly received distress signals. Major oil-producing countries in the Middle East, including Saudi Arabia, Kuwait, and Iraq, export oil through the Strait of Hormuz. About one-fifth of global oil consumption passes through the Strait of Hormuz. Reuters analyzed: "The explosion of the Iranian oil tanker reflects the Trump administration's plan to induce regime change in Tehran by paralyzing the Iranian economy."
Bloomberg reported that hedge funds and other speculators are betting on oil price increases at the fastest pace since 2023. This is interpreted as markets believing the war will be prolonged. AFP reported that the U.S. and European Union have begun consultations to prevent a rapid spike in oil prices. The consultations reportedly include releasing strategic petroleum reserves and replacing Iranian supply with oil from non-Middle Eastern countries. If oil prices exceed $100 per barrel, it could significantly impact not only Korea but the global economy. Although inflation had been stabilizing, long-term inflation could become a serious risk if energy prices spike again.
**Trump's 'Political Calculations' Suspected Behind War... Prolonged Inflation a Variable**
The possibility that President Trump is calculating political effects from this war also cannot be excluded. Some analyses suggest the war was started with an eye on the November 4 midterm elections. Scott Ritter, a former UN weapons inspector, said in an interview with YouTube channel Dialogue Works: "There is no military or strategic rationale, only political rationale. Trump needs this war for the midterm elections." Former CIA analyst Larry Johnson made similar assessments. He pointed out: "The Iran war will help Trump and the Republican Party in the upcoming midterms and ultimately the presidential election."
There are also analyses noting that President Trump himself may have revealed such intentions. In a Truth Social post on the 2nd, Trump wrote: "The great Republican Party should easily win the House in 2026. I believe this will be the case!" Some interpret this post as suggesting the war is intended to serve political purposes. However, whether the war will actually benefit Trump politically remains uncertain. The Economist analyzed: "Wars can unite the country, but if they drag on, Trump and the Republican Party could face backlash."
The deepest concern in all this is that the prolonged war could accelerate inflation. If oil prices continue to surge, prices of most industrial products will rise. In this case, the U.S. Federal Reserve (Fed) could be forced to raise interest rates again. President Trump's approval rating could also take a hit. A Gallup poll on the 4th showed 52% of Americans support the Iran war, but this figure is expected to decline if the war drags on. For Korea as well, the Iran war is not someone else's business. With oil prices rising and exchange rates increasing, the Korean economy's burden will inevitably grow....
Published 2026.03.06. 10:40:24
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