WorldPosted at: Sep 16 2026 8:33PM


Iran war cost US $38bn in first five months, another $2-3bn to add up in each month

Washington, Sep 16 (UNI) The Iran war has cost the Pentagon about $38 billion in its first five months, with another $2- 3 billion expected to add up for each additional month of fighting, according to a new Congressional Budget Office (CBO) analysis.
The estimate, which covers costs through August 1, includes replacing weapons used in combat, equipment lost during operations, increased flight activity and higher fuel costs.
The monthly bill could vary depending on the intensity of the fighting. The CBO estimates that operations at the level seen in May and June cost about $2 billion a month, while the higher intensity recorded in July raised the monthly cost to roughly $3 billion.
The agency said the figure could rise further if military operations escalate.
The CBO estimate is close to the $37.5 billion figure Defense Secretary Pete Hegseth gave Congress in July. A more recent Pentagon estimate provided to lawmakers in August put the cost at more than $42 billion.
The Pentagon figure was given to congressional defence committees on August 13, according to a congressional aide cited by The Hill, representing an increase of about $4.5 billion from the department’s previous public estimate.
The Pentagon comptroller’s office has said the Defense Department and the Office of Management and Budget have supplied Congress with more than 10 updates on the cost of the conflict, covering obligations, operational expenses and unfunded replacement costs. Its latest update was sent to Congress on August 28.
The CBO’s $38 billion estimate covers costs through August 1, while the Pentagon’s higher figure was provided to lawmakers later in the month.
The economic effects of the war could extend beyond direct military spending. The CBO said disruptions to energy shipments through the Strait of Hormuz and shipping routes in the Red Sea have increased energy costs, potentially pushing up prices for petrol, diesel, jet fuel and other goods.
The agency expects headline personal consumption expenditures inflation in the first quarter of 2027 to be about 0.5 percentage points higher than projected in its February forecast. Core PCE inflation, which excludes food and energy, is expected to be 0.3 percentage points higher.
The impact on underlying inflation is expected to appear more gradually but last longer, potentially complicating decisions by the Federal Reserve on interest rates. Higher inflation could reduce the central bank’s room to cut rates even if weaker economic activity increases pressure for monetary easing.
The conflict has also placed great strain on stocks of some US munitions, namely Patriot missile-defence interceptors, which are at a critical low due to Washington’s heavy supply of missile batteries to Ukraine in its war with Russia.
The CBO said replenishing some depleted inventories could take five years or more and warned that lower stockpiles could greatly restrict the US military’s ability to respond to another potential major conflict with an adversary, particularly China, involving heavy use of ballistic and cruise missiles.
Restocking those munitions would require additional federal spending, further increasing the fiscal cost of the war.
The White House requested more than $87 billion in additional funding in June, with about $67 billion intended for the Defense Department, including money to replenish munitions and cover operational costs.
The administration has also sought a record $1.5 trillion defence budget for fiscal 2027.
The conflict’s mounting cost has also placed increasing pressure on Congress to approve additional military funding. The House passed a roughly $95 billion package in July for financing the Iran war and other administration priorities, though the measure is yet to advance in the Senate.
The White House has also explored using the budget reconciliation process to provide hundreds of billions of dollars in additional defence spending.
The CBO stressed that its $38 billion estimate does not capture the conflict’s full economic cost. It excludes some expenses incurred by other federal agencies and certain longer-term costs.
The agency also said there is uncertainty around its estimate because the Pentagon did not provide all the information requested by the CBO.
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