Global Defense: 38 billion for Iran, Europe on the brink of rupture, and a technological race reshaping power dynamics

Hook: The American offensive against Iran has already cost 38 billion dollars, and the Congressional Budget Office estimates that several additional billions are committed each month depending on the intensity of the fighting. At the same time, the President of the European Commission warned that the European Union finds itself in the most precarious situation in its history, facing an openly hostile world. Two simultaneous facts that summarize the new security equation: high-intensity conflicts with exponential bills, hybrid threats at Europe's borders, and a technological race that redistributes power.

Key Points

1. The cost of the war against Iran is becoming a factor of internal economic destabilization. The 38 billion dollars already spent are just a first step. The Congressional Budget Office estimates the monthly expenditure at several additional billions of dollars, varying according to the intensity of the fighting. This dynamic fuels rampant inflation and shortages in the United States, while depleting military stocks. Rising oil and consumer goods prices generate growing political discontent, weakening the American administration's domestic position. The link between military effort and economic resilience becomes a central parameter of power: a country can win a campaign and lose its internal stability.

2. Europe is preparing for a structural hardening of its security. The President of the European Commission advocated for the creation of a "European Security Council" and an emergency protocol, while proposing that Canada become the first non-European partner associated with this architecture. She also called for strengthening global partnerships, defending women's rights, and promoting human-centered artificial intelligence, while denouncing an "unsustainable" trade deficit with China. This initiative comes as Russian and hybrid threats on European soil intensify. The approach suggests a transition towards a more integrated European defense, but also one more dependent on external partnerships, in a context where the United States is reorienting its priorities towards the Indo-Pacific and the Middle East.

3. South Korea is negotiating its strategic alignment with Washington. South Korean Foreign Minister Cho Hyun is meeting US Secretary of State Marco Rubio in Washington to discuss 350 billion dollars in South Korean investments in the United States and security issues. These discussions come as allies try to overcome disagreements on the implementation of a trade agreement, and as Seoul evaluates potential military support in the Strait of Hormuz. Delays in the investment agreement have been significant enough to weigh on the bilateral climate. The stakes go beyond simple military cooperation: it is a massive transfer of capital that links security and economy.

4. Japan is betting on quantum sensors to counter China in the Pacific. Faced with China's growing claims, Japan is developing a project for miniaturized quantum magnetic sensors embedded on low-cost drones, planned for 2031. These ultra-sensitive sensors aim to detect submarines by sensing tiny magnetic disturbances, offering mobile and dense surveillance of strategic areas. This innovation illustrates the technological race in anti-submarine warfare, where early detection becomes a decisive advantage. The timeline (2031) indicates medium-term planning, which contrasts with the urgency of current threats.

5. France is accelerating on private dual-use space launchers. The French startup HyPrSpace, in collaboration with the Ministry of the Armed Forces, will launch the suborbital micro-rocket Baguette One from Biscarrosse in 2027. This first private civilian launch from mainland France validates an innovative, simpler, and more economical hybrid propulsion technology. The project marks the birth of a sovereign NewSpace ecosystem, offering services for scientific research and defense. It constitutes a crucial step before the orbital launcher OB-1, positioning France in a segment where private actors become instruments of sovereignty.

Context

The current period is marked by a convergence of crises: war in Ukraine, tensions in the Middle East, Sino-American competition in the Pacific, and the proliferation of hybrid attacks in Europe. Historically, periods of strategic fragmentation have often preceded major alliance realignments. The end of the Cold War gave way to economic globalization driven by the promise of a stable international order. Today, states are massively reinvesting in their military capabilities, while multilateral institutions struggle to adapt. The return of high-intensity warfare in Europe and the Middle East has shattered the assumptions of peace dividends. In this context, emerging technologies — quantum, space, drones — are becoming levers of power, and critical supply chains — semiconductors, metals, energy — geopolitical weapons.

Key Players

The United States remains the dominant military power, but its engagement in Iran and its support for Ukraine and Taiwan create a strategic overload. The Congressional Budget Office estimates the cost of the war against Iran at 38 billion dollars, an amount that could grow rapidly. Washington seeks to share the burden with its allies, as evidenced by discussions with South Korea on 350 billion dollars in investments.

The European Union, under the impetus of the Commission, is trying to structure a common defense. The proposal for a "European Security Council" and the association of Canada mark a desire to create a coalition of like-minded countries. However, internal divisions on defense issues and energy dependencies persist.

China continues its military expansion in the Pacific, which pushes Japan to invest in advanced technologies such as quantum sensors. South Korea, an ally of the United States, must balance its relationship with China, its main trading partner.

Russia, through its actions in Ukraine and its hybrid threats, remains a central actor in European destabilization. Iran, the target of the American offensive, sees its economy and military capabilities severely affected, but retains regional levers of influence.

Data and Figures

Available data shows that the price of gold reached 4,348.99 USD/oz on September 12, 2026, a historically high level reflecting demand for safe-haven assets in the face of geopolitical uncertainties. Oil, with Henry Hub natural gas at 2.81 USD/mmbtu and jet fuel at 4.341 USD/gal, remains a key indicator of tensions. Rising energy prices fuel inflation and weigh on importing economies.

Base metals, such as copper at 0.4508 USD/oz and aluminum at 0.1009 USD/oz, are essential for military equipment and infrastructure. Zinc, nickel, and lead show prices that reflect sustained demand. These raw materials are at the heart of defense supply chains, and their volatility can affect armament programs.

Furthermore, alerts on renewable energy production in France — solar, wind, hydraulic — show thresholds exceeded in several regions, which could reduce energy dependence and free up resources for other priorities. However, hydraulic production in Centre-Val de Loire fell by 51.03%, illustrating the variability of renewable sources.

Analysis of Stakes

In the short term (1-6 months), the cost of the war against Iran is expected to continue to weigh on the American economy, with a risk of stagflation. Negotiations between South Korea and the United States on investments could lead to an agreement, strengthening the Washington-Seoul axis against Pyongyang and Beijing. In Europe, the establishment of a European Security Council could face political resistance, but emergency measures could be adopted.

In the medium term (1-3 years), the technological race will intensify: Japan could deploy its first quantum sensor drones before 2031, while France will test its micro-rocket in 2027. These advances could alter regional balances. The question of technological sovereignty will become central, with implications for exports and alliances.

The winners of this dynamic are the defense industries and advanced technology sectors, which benefit from massive investments. The losers are economies dependent on energy imports and civilian populations in conflict zones. Affected sectors include aeronautics, space, electronics, but also agriculture and transport, impacted by rising energy costs.

Prospective Hypotheses

Scenario 1: Controlled escalation and strengthening of alliances (probability: 45%). Conditions: The United States maintains pressure on Iran without expanding the conflict, Europe structures its defense with Canada, and South Korea concludes an investment agreement. Indicators to monitor: evolution of US military spending, effective creation of the European Security Council, signing of technological agreements between Japan and its allies.

Scenario 2: Stalemate and fragmentation (probability: 35%). Conditions: The war against Iran drags on, costs exceed forecasts, political tensions in the United States worsen, and Europe fails to unite on defense. Indicators: oil price rise beyond 100 USD/barrel, degradation of US sovereign rating, failure of negotiations on the European Security Council.

Scenario 3: Technological breakthrough and rebalancing (probability: 20%). Conditions: Japan successfully deploys its quantum sensors, France succeeds in its launch, and new technologies disrupt balances. Indicators: successful tests, export contracts, reduction of submarine detection costs.

Why it matters

International security is no longer a domain reserved for diplomats and military personnel. It shapes energy prices, supply chains, public budgets, and ultimately, household purchasing power. The 38 billion dollars already spent by the United States in Iran are resources that are not going to education, health, or infrastructure. The race for quantum and space technologies will determine which countries can protect their interests in the coming decades. For businesses, investors, and citizens, understanding these dynamics is essential to anticipate risks and seize opportunities. The question is no longer whether defense will transform the global economy, but at what speed and at what cost. And you, are you ready to take this into account in your decisions?