U.S. Sold $33 Billion in Weapons to Gulf Countries in the Last Year

Mar 28, 2016

If war is a nasty business, it’s also a lucrative one. New figures released by the State Department show that the United States has sold $33 billion worth of weapons to its Gulf allies since May of last year, with more deals in the works as the business of bombing the Islamic State continues to boom.

“Consistent with the commitments we made to our Gulf partners at the Camp David summit last May, we have made every effort to expedite sales,” State Department spokesman David McKeeby told Defense News.

In the eleven months since, the State Department has helped with the export of everything from attack helicopters to ballistic missile defense systems to precision guided munitions to Gulf Cooperation Council states—that’s Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.

The Gulf spending spree is two-pronged. Sales of higher-end weapons systems—things like advanced naval frigates, attack helicopters, and defensive missile batteries—stem in large part from the U.S.-Iran nuclear accord. GCC states, and Saudi Arabia in particular, worry that a resurgent Iran unencumbered by economic sanctions will move to bolster its ailing military, upsetting the regional balance of power.

But where munitions are concerned, the twin bombing campaigns against the Islamic State in Iraq and Syria and against Houthi rebels in Yemen are driving sales of precision weapons and “dumb” bombs alike. In 2015, the U.S. delivered 4,500 precision guided munitions to GCC states, McKeeby says, including 1,500taken from the U.S. military’s own inventories.

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In December, Air Force chief of staff General Mark Welsh said the U.S. was “expending munitions faster than we can replenish them,” warning of a shortage of precision-guided Hellfire missiles and other munitions. Air Force Secretary Deborah Lee James put it somewhat more bluntly, stating “we’re in the business of killing terrorists, and business is good.”

Business certainly is good. In a note to investors, Guggenheim Partners defense analyst Roman Schweizer noted this morning that precision munitions makers like Lockheed Martin (LMT, -0.77%), Raytheon (RTN, -1.40%), Boeing (BA, -0.81%), and General Dynamics (GD, -1.08%) all stand to benefit from the uptick in overseas sales. Lockheed alone has already received $18 million to bump its Hellfire missile production from 500 to 650 missiles per month, Schweizer writes. The company has also quadrupled production of Paveway II laser-guided bombs, a favorite of the Saudi Royal Air Force (the State Department cleared a sale of 1,000 Paveway II bombs to Saudi Arabia in November of last year).

All that’s on top of the $1.8 billion the Pentagon is asking for in its fiscal 2017 budget request to fund the production of 45,000 smart bombs to replenish its own stores. Meanwhile, Department of Defense spending on missiles rose 14% from fiscal 2015 to fiscal 2016, and another 7% increase is included in the fiscal 2017 request, according to Schweizer’s note (ammunition spending is also slated to rise 12% in fiscal 2017 over the year prior, though that’s a broad category encompassing both high- and low-end munitions).

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http://fortune.com/2016/03/28/u-s-arms-sales-gulf/

1 reply

  1. Just imagine if this amount would have been spent for peaceful means!!! job creation !!! education !!! benefits for the poor Muslims everywhere!!! Not only would Arab youth not wish to emigrate but European and American youth would like to Immigrate to Muslim countries !!!! When will the Arab rulers wake up! Listen to the Khalifa of Islam and his message of peace!!!

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