US arms sales surge as countries rush to replenish military stockpiles

US military equipment sales to foreign governments surged by 29% in 2024, reaching a record $318.7 billion, according to the State Department.

The significant increase in sales reflects a global uptick in demand as countries look to replenish supplies sent to Ukraine and prepare for potential large-scale conflicts, Caliber.Az reports referring to foreign media.

The sharp rise in sales signals continued strong performance for major US defence manufacturers such as Lockheed Martin, General Dynamics, and Northrop Grumman. With global instability on the rise, analysts predict that these companies’ shares will see further growth, according to Reuters.

During his presidential campaign, Joe Biden’s predecessor, Donald Trump, urged US allies to increase their defence investments. He proposed a substantial hike in NATO's defence spending target, suggesting it should rise to 5% of GDP — far above the current 2% target, which no NATO member, including the US, currently meets.

The demand for weapons has surged in the wake of Russia's full-scale invasion of Ukraine, placing immense pressure on defence contractors to meet the growing needs of countries around the world. Governments are urgently placing orders to bolster their military stockpiles, while the US continues to replenish its own supplies sent to Ukraine.

The State Department has described arms sales and transfers as vital tools of U.S. foreign policy with potentially long-lasting impacts on regional and global security.

Noteworthy deals in 2024 include $23 billion in F-16 jets and upgrades for Türkiye, $18.8 billion in F-15 fighter jets for Israel, and $2.5 billion in M1A2 Abrams tanks for Romania.

Many of these deals are contributing to the growing backlog at US defence companies, with future quarters set to benefit from large orders, including hundreds of thousands of artillery rounds, Patriot missile interceptors, and armoured vehicles.

Foreign governments typically purchase US arms through two main channels: direct commercial sales negotiated with defence companies or foreign military sales facilitated by the U.S. government, often coordinated by Defense Department officials at embassies. Both methods require government approval.

In fiscal 2024, direct commercial sales reached $200.8 billion, up from $157.5 billion in 2023. Meanwhile, government-facilitated foreign military sales climbed to $117.9 billion, up from $80.9 billion the previous year.

By Tamilla Hasanova