Iran War Cost Hits $38B, Set to Climb by $3B Every Month

The six-month U.S. war against Iran has cost $38 billion through August 1 and is projected to add another $3 billion a month, according to the Congressional Budget Office.

The assessment places a growing price tag on a conflict that has also depleted U.S. munitions, damaged military infrastructure and contributed to higher energy prices.

The CBO said Tuesday the war could lift inflation by 0.5% during the first three months of 2027.

Munitions Drive the Bill

The largest share of the expenditure stems from the rapid use of U.S. munitions, according to the CBO.

The agency estimated that rebuilding the affected stockpiles could take five years. Reuters reported in August that the U.S. had used “virtually all” of its long-range precision missiles during the conflict.

Defense Secretary Pete Hegseth told senators on July 21 that war-related costs were about $37.5 billion, close to the CBO estimate.

At the same hearing, Hegseth sought nearly $90 billion in emergency funding to rebuild weapons inventories.

“Without these funds, we face critical shortfalls,” he said.

The CBO said shortages of critical weapons, including missile interceptors, could constrain the Pentagon’s ability to respond to another major conflict, including potential hostilities involving China and Taiwan.

Pentagon Disputes Shortage Findings

The Department of Defense did not cooperate with congressional financial auditors, according to the CBO.

Pentagon officials nevertheless rejected the report’s assessment of weapons shortages.

“We have everything required to strike at the time and place of the president’s choosing,” chief Pentagon spokesperson Sean Parnell said.

White House spokeswoman Anna Kelly said the U.S. military has “more than enough munitions, ammo, and stockpiles to serve all of the Commander-in-Chief’s strategic goals and beyond.”

The CBO inquiry was requested by Brendan Boyle, the senior Democrat on the House Budget Committee.

Boyle criticized the financial and human cost of the conflict, saying the report showed that the war had cost taxpayers “tens of billions of dollars and counting.”

Eighteen U.S. service members have died in the war.

Additional Costs Remain Outside Estimate

The $38 billion calculation does not capture all war-related expenditures.

The report excluded the cost of recent strikes on commercial vessels in the Strait of Hormuz and attacks on U.S. military installations across the region.

It also omitted borrowing costs associated with financing the conflict, which the CBO said could add tens of billions of dollars.

A separate Pentagon inspector general assessment put the cost through June 19 at $33.4 billion.

That estimate included roughly $184 million in damage to U.S. diplomatic facilities caused by Iranian strikes.

The inspector general also reported that Iran had damaged or destroyed hundreds of buildings at U.S. bases in the Middle East, alongside fighter jets, refueling aircraft and drones.

Energy and Fiscal Pressures

The economic effects extend beyond direct military spending.

Attacks in and around the Strait of Hormuz, as well as strikes on energy facilities in neighboring Gulf states, have pushed up energy prices.

Before the war, roughly 20% of the world’s oil moved through the waterway.

The CBO expects those disruptions to contribute to a 0.5% increase in inflation during the first quarter of 2027.

The spending also comes as U.S. public debt has moved above $40 trillion, increasing scrutiny of the conflict’s longer-term effect on federal finances.

President Donald Trump has repeatedly contrasted the Iran war with the U.S. campaigns in Iraq and Afghanistan.

The eight-year Iraq war cost $2 trillion, according to figures reported by Reuters, while the two-decade Afghanistan conflict cost $2.3 trillion, according to Brown University’s Costs of War project.