Who 'pocketed' huge profits, benefiting despite the US President's warning?

US President Joe Biden warned on October 10 that he would fight against any country or organization that thinks of "exploiting" the Israeli-Palestinian conflict. He also pledged to firmly support Israel, increasing additional military equipment, including ammunition and interceptor missiles.

Xung đột israel và Palestine ai ‘đút túi’ khoản lợi nhuận khủng khiếp? (nguồn: AP)

US President Joe Biden visits the Lockheed Martin plant in Troy, Alabama, where Javelin missiles are manufactured for Ukraine, on May 3, 2022. (Source: AP)

“To any country, any organization, anyone who thinks of exploiting the situation, I have only one word: Don’t. Our hearts may be broken, but our resolve is clear,” the US leader warned other parties in the region not to try to “exploit” the war.

Immediately, on October 10, the first plane carrying US ammunition for Israel's attacks on the Gaza Strip landed in Israel.

Putting aside the complex political situation, looking at things from another angle, it is obvious that this rapid provision of military aid shows that US military-industrial contractors will again benefit the most from a conflict in the Middle East, just as it has done with the Russia-Ukraine conflict and other past turmoils.

Here’s how some U.S. defense stocks fared this week. Lockheed Martin shares rose nearly 9% on Oct. 9, the biggest gain for the largest U.S. defense contractor since March 2020. Northrop Grumman shares also had their best day of 2020.

Arms investors always win in a military conflict, and the Israel-Palestine flashpoint is no exception.

The Globaltimes commented that while the Biden administration warned any group not to "take advantage" of the Israel-Palestine conflict, if one were to name any group that has the opportunity to exploit and profit from the conflict, the US military-industrial complex would be present.

Whenever there is a military conflict or even simply regional tension anywhere in the world , American arms dealers always find a way to turn it into an opportunity to get rich.

According to media reports, the five giants of the US military-industrial complex - Lockheed Martin, Boeing, Raytheon, General Dynamics and Northrop Grumman - have benefited the most from those points of conflict.

An article in The Nation in May said that during the Russia-Ukraine military conflict, the Big Five not only sold large quantities of military equipment to Ukraine, but also took the opportunity to market their products to other European countries. In addition, they also received more contracts and funding from the US government.

As a result, in 2022, Ukraine became the world's third-largest arms importer, ranking fifth among the US's main arms export destinations, according to data from Statista.

US media have also reported many times that the country's military industrial complexes are running at full capacity to meet the overwhelming orders from the Pentagon and NATO allies.

In addition, the US State Department said earlier this year that direct military sales by US companies increased 48.6% to $153.7 billion in fiscal 2022 from $103 billion in fiscal 2021, largely due to arms sales to Ukraine, amid escalating conflict.

There are two main ways for foreign governments to buy weapons from U.S. arms manufacturers: direct sales, through negotiations between a government and a defense contractor. The second way is through foreign military sales, in which a government makes a request to a U.S. Department of Defense official at the U.S. embassy in the nation’s capital. But either way, U.S. government approval is required for deployment.

According to information from the US State Department, notable military deals in 2022 include: a $13.9 billion contract to transfer F-15ID fighters to Indonesia; a $6.9 billion contract to transfer warships to Greece; and a $6 billion deal to sell M1A2 Abrams tanks to Poland. Of which, General Dynamics is the unit in charge of producing Abrams tanks, Boeing is in charge of the F-15 fighter order, and Lockheed Martin is responsible for shipbuilding.

According to the Stockholm International Peace Research Institute (SIPRI), the United States is currently the leading country in the list of global arms producers, accounting for 40% of the market share in the period 2018–2022, up 33% compared to the previous 5 years. Washington is currently the main arms supplier to 103 countries and territories. A total of 41% of US arms exports go to the Middle East, Asia and Oceania account for 32%, 23% to Europe, and about 23% mainly to Washington's NATO partners.

Russia currently ranks second with 16% of the world's arms export market share. However, since the outbreak of the Russia-Ukraine conflict, huge profits from the arms market have also prompted many world military companies to return to this market after many years of downsizing. Accordingly, France, China, and Germany are the leading military contractors, following the US and Russia, respectively.

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