Did the U.S. Defense of Israel from Missile Attacks Meaningfully Deplete its Interceptor Inventory

Critical Questions by Wes Rumbaugh

Published December 4, 2024

Following Iran's ballistic missile attack on Israel on October 1, defense analysts have expressed concerns about the U.S. use of about a dozen Standard Missile-3 (SM-3) interceptors. The debates surrounding aid to Ukraine have turned concerns about munitions production into an almost reflexive reaction to any use or transfer of U.S. weapons. While there are reasonable concerns about the capacity of certain air and missile defense interceptors, for example, expenditure rates of the SM-2 missile in the Red Sea, the case of SM-3 production is one where the concern is somewhat overblown.

Some commentators have observed that the U.S. Navy fired a year's worth of SM-3 interceptors in a single day. Based on the procurement numbers projected in the FY 2025 budget proposal, this is technically true. However, while it's easy to look at a single year's procurement, a more complete analysis requires looking at both procurement rates and deliveries over multiple years, as well as different types of rounds within the Standard Missile family. The production rate of the type of Standard Missiles used in October has, in fact, been relatively more robust.

As recently as 2023, for instance, the United States procured 71 SM-3s in a single year. Additionally, recent Missile Defense Agency (MDA) budgets have emphasized interceptor capacity. Because of the delay between procurement and delivery of interceptors, these prior investments are bearing fruit now to replace the expended interceptors. If the 12-interceptor salvo consisted entirely of SM-3, that would make up 2.5 percent of cumulative deliveries. That would be a small price to pay to limit the damage of the Iranian attack, provide space for diplomacy, and avoid an immediate Israeli retaliation.

Q1: What was the U.S. role in intercepting missiles in the Iranian attack on Israel?

A1: On October 1, Iran fired over 180 ballistic missiles at multiple targets in Israel. The attacks reportedly included a mix of Ghadr and Emad missiles. Iran also claimed that the salvo included Fattah-1 missiles, which it touts as an advanced "hypersonic" weapon but is more accurately described as a terminally maneuvering ballistic missile.

Israel conducted the bulk of the defense engagements using a mixture of Arrow 2 and Arrow 3 interceptors. The Arrow 2 engages targets in the upper atmosphere, while the Arrow 3 is an exo-atmospheric interceptor, used to engage longer-range ballistic missiles while they transit space. Both interceptors are the result of extensive cooperation and U.S. aid to Israel dating back to the 1980s. Initial damage assessments suggest a reasonable, but not unqualified, success for the defenses with a limited number of missile strikes hitting both military and civilian infrastructure. Considering the size of the missile salvo, however, the assessed damage levels provide evidence of significant interceptor success.

In addition to supporting Israel's development and procurement of its own missile defense systems, two U.S. destroyers, the USS Cole (DDG 67) and USS Bulkeley (DDG 84), fired 12 interceptors as part of the defense. The destroyers are part of an enhanced U.S. naval presence in the Middle East; a response to both last October's Hamas attack on Israel and persistent Houthi attacks on international shipping in the Red Sea. While defense officials have declined to specify the missiles fired on the record, a U.S. official confirmed to USNI News that the ships used "a combination of weapons, including the Standard Missile-3." While the SM-3 likely made up most interceptors fired by U.S. ships, the phrase "combination of weapons" suggests that SM-6, a terminal ballistic missile defense interceptor, may also have been used.

Q2: How does the expenditure of SM-3 missiles compare to procurement rates?

A2: Even before the October missile launches, analysts have been raising concerns about the rate of SM-3 procurements in the 2025 budget. The FY 2025 budget request, released in March 2024, only included procurement of 12 SM-3 Block IIA variant missiles and terminated procurement funding for Block IB interceptors. In testimony about the 2025 Navy budget request-shortly after the April 14 attack on Israel, in which SM-3 IBs were used-Secretary of the Navy Carlos Del Toro highlighted the need to procure additional SM-3 interceptors. If one only looks at the 2025 budget request, the recent missile defense engagements would raise serious questions about the overall inventory of SM-3 interceptors.

Nevertheless, a more complete look at data on MDA procurement rates for SM-3 missiles going back to 2009 presents a somewhat more sanguine picture. In the 10 years prior to 2025, MDA procured an average of 50 missiles per year, peaking at 71 missiles in 2023 (as seen in the figure below). This period also included a multiyear procurement of SM-3 Block IB missiles between 2019 and 2023, which procured nearly 200 missiles and provided a clear and stable demand signal to industry. This suggests a much healthier picture of SM-3 availability than simply looking at the 2025 request alone.

The procurement rate for the more capable SM-3 Block IIA missiles is less rosy, but the overall budgetary picture for that missile provides some reasons for optimism. The greater capability of the Block IIA variant comes with an increased unit cost, constraining MDA from buying it in greater quantities. Still, MDA procured nearly 100 SM-3 Block IIA missiles between 2018 and 2024. Congressional appropriators have also repeatedly shown willingness to increase Block IIA procurement levels when they have concerns about future inventories, providing funding for additional missiles in the final appropriations bills in 2021, 2022, and 2023. Congressional action is again likely in 2025, with three of the four defense committees adding funding to either restart procurement of SM-3 Block IB interceptors or to expand Block IIA production capacity.

Far more than the employment of a dozen interceptors, it was the 2025 budget's plan to terminate the SM-3 IB procurement that jeopardized future SM-3 inventory. This decision is not new, however. MDA has used this approach to a constrained budget environment before, taking risks on interceptor procurement levels in its 2017 budget request. The 2025 decision, however, was not to procure fewer interceptors but to terminate the procurement altogether. These cuts come as the whole Department of Defense (DOD) tries to comply with budget caps and manage considerable fiscal uncertainty. MDA's budget continues to experience strains as its mission needs, including for hypersonic defense, grow and funding profiles remain flat.

Q3: How does the U.S. participation in the defense of Israel affect its interceptor inventory and production?

A3: Put in a larger context, the employment of up to 12 SM-3s IBs will not have a significant effect on inventory and production. While procurement rates are often used as a proxy measure for inventory and production, additional DOD budget data can provide more clarity on these issues. Data from the P-21 production schedules released with the DOD procurement justification books shows that the smaller 2025 procurement of SM-3 interceptors would not directly affect missile delivery rates until 2028. While this data is more challenging to extract from the annual budget documents and has some issues with data quality, it provides a more direct estimate of current production rates than using simple procurement quantities.

The production schedule data again provides some reasons for optimism about the effect of recent interceptor launches on SM-3 production. Because of the time it takes to translate procurement appropriations into production, MDA expects to take delivery of 71 new missiles in 2025 and 66 missiles in 2026. As the figure below shows, these deliveries are the result of stronger procurement funding between 2019 and 2023. As a result, MDA's prior investments will produce new interceptors to replace those expended over Israel in the short term without any further funding.

When considering the impact of the SM-3 engagement on inventory levels, it is also important to remember that these deliveries are cumulative over time. Missiles delivered in one year are not discarded immediately if they are not used for testing or other operational concerns, but rather continue to contribute to the overall inventory. The figure below shows the cumulative deliveries of SM-3 interceptors over time, which shows a total of 470 interceptors delivered by the end of calendar year 2024. Without accounting for missiles aging out, these numbers suggest that an engagement using 12 SM-3 interceptors would use about 2.5 percent of the overall SM-3s delivered to date, a modest expenditure to limit the damage of Iran's attack on a close ally.

Using cumulative deliveries as an approximation of inventory levels does have some limitations. Over time, missile components degrade in quality, increasing the risk of malfunction and aging them out of the active inventory. While MDA has undertaken service life extension efforts for all of its variants of the SM-3 missile, some of the older missiles, like the Block IAs, are no longer in the active inventory due to age or testing expenditure. Even with some imprecision, cumulative deliveries offer greater insight into the overall inventory levels of the SM-3 missile than simply looking at any single year's procurement figures. No figure will precisely mirror the classified actual inventory numbers, but cumulative deliveries are likely closer to the actual figure than data from a single procurement year.

Q4: What is the cost and timeline to replenish the inventory of SM-3 interceptors?

A4: Even with healthy interceptor inventories in the short term, Congress and the DOD will need to account for the usage rate of SM-3 interceptors in formulating their longer-term plans. For instance, Congress could provide supplemental funding, which would not be subject to budget caps, to replenish the inventory of weapons fired in the defense of Israel. Any decision to increase interceptor procurements, though, would also involve important choices about cost, the future composition of the SM-3 inventory, and production capacity.

If replenishing and sustaining the inventory while minimizing cost is the most important consideration, DOD and Congress should restore the procurement of SM-3 Block IB interceptors. As Figure 4 shows, Block IB missiles are considerably cheaper than Block IIA interceptors. The comparatively lower range of the IB interceptors also allows them to engage targets in different windows than the IIA. This cost advantage would also translate into the ability to procure more interceptors or allow for replenishment of the inventory at a lower price tag. The complicated operational nature of air and missile defense engagements suggests that unit cost should not be the only variable considered.

The decision to increase procurements of Block IB interceptors over the more advanced Block IIA would come with the cost of sacrificing some capability. The Block IIA interceptors are more expensive in large part because of their greater capability. The 2025 president's budget proposal eliminated funding for the continued new production of SM-3 Block IB missiles as part of a "shift in Department priorities," suggesting that new threats require the greater capability of Block IIA. If the SM-3 IB line is not restored, Congress and MDA could accelerate this planned shift in the inventory of SM-3 missiles by replacing the missiles fired over Israel with more Block IIAs.

As established earlier, any decision to increase interceptor procurements will take time to translate into production. These choices will affect production in 2028 and beyond, rather than having a significant immediate impact on deliveries. The short-term impact of increasing SM-3 procurements would be to provide a clear demand signal to support investments in facilities and equipment. Yet this is insufficient on its own. Any sustainable solution will require Congress and the DOD to resolve the fiscal issues causing pressure on MDA procurement accounts and program for the desired quantity and capability mix of SM-3 missiles in the 2026 budget.

While the concern about munitions production is a long overdue correction to prior underinvestment, not every use of air and missile defense interceptors requires an immediate restocking of inventories. The finite nature of the defense budget necessitates consideration of prior procurement levels beyond a single year of data to ensure future investments go to the right priority areas. Prior procurements of SM-3 interceptors have produced a healthy inventory of missiles despite the lower level of procurement funding in the 2025 budget. Overreaction to this single data point threatens to skew investments away from areas where it is more immediately necessary, like replacing SM-2 missiles used in the Red Sea with more SM-6s.

Wes Rumbaugh is a fellow with the Missile Defense Project at the Center for Strategic and International Studies in Washington, D.C.

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