Iran War’s Price Tag, Pegged at $38 Billion, Is Growing as Much as $3 Billion a Month

The U.S. war in Iran has incurred direct costs of approximately $38 billion in the first five to six months of fighting, according to a new report from the Congressional Budget Office (CBO). This figure, current as of August 1st, primarily covers the replacement of expended munitions, increased flying hours, and higher fuel costs. The CBO estimates that the war is currently costing the U.S. between $2 billion and $3 billion per month, a rate that can increase during periods of escalated hostilities. This amount is slightly higher than the $37.5 billion figure cited by Defense Secretary Pete Hegseth in July congressional testimony.

The largest component of the war's cost is the $21.7 billion required to replenish munitions stockpiles. This includes $7.3 billion for land-attack cruise missiles, $13.1 billion for missile defense interceptors, and $1.2 billion for other munitions. Additionally, $10.4 billion has been spent on increased flying hours and $2.7 billion on higher fuel prices. The CBO also noted that it could take up to five years to fully replenish U.S. munitions stockpiles, particularly critical items like missile interceptors, raising concerns about the nation's readiness for other potential conflicts.

Beyond direct military expenditures, the war is also impacting the U.S. economy, with the CBO projecting a 0.5 percentage point increase in year-over-year inflation by the first quarter of 2027. Indirect costs, such as the approximately $107 billion in additional gasoline and diesel expenses borne by consumers, are not included in the CBO's direct cost estimate. Mark Zandi, chief economist at Moody's Analytics, estimated a cost of $1,000 for a typical American household. The CBO report does not factor in the cost of repairing damaged U.S. facilities, diplomatic operations, foreign aid, or the borrowing expenses associated with financing the war. Democrats, including Representative Brendan Boyle who requested the CBO study, are using these escalating costs as a key campaign issue in the upcoming November elections.